Medtronic Earnings, Revenue On The Rise One Year After Covidien Deal
A year after Medtronic finalized its controversial, $50 billion purchase of Dublin-based Covidien, the medical device maker is reaping increased revenue and earnings during its third quarter.
For the three-month period ending January 29, Medtronic’s worldwide revenue rose to $6.9 billion, a 6 percent increase when including Covidien in its year-ago results. Without Covidien, the now Dublin-based company’s revenue was $4.3 billion in its previous third quarter, a 61 percent difference. That $2.6 billion in added revenue is, in part, a result of the legacy Covidien products and business that were acquired and distributed throughout Medtronic’s four business sectors.
In the previous quarter, with Covidien revenue included for comparison, Medtronic’s cardiac and vascular business had year-over-year sales growth of 8 percent to $2.4 billion, its minimally invasive therapies business increased 5 percent to $2.3 billion, its restorative therapies business rose by 7 percent to $1.7 billion and its diabetes business grew by 6 percent to $474 million.
“As we mark the one year anniversary of the Covidien acquisition, we have preserved the growth of both companies and are realizing significant cost synergies and incremental revenue opportunities,” Medtronic CEO Omar Ishrak said in a statement. “Our combined company has a much more diversified revenue base, which together with our sustained execution, gives us increased confidence that consistent, mid-single digit revenue growth is achievable.”
Medtronic’s profit took a 12-point leap to $1.1 billion, up from $977 million during the same period last year. And the company’s adjusted earnings per share of $1.06 matched analyst predictions.
Looking toward the fourth quarter, Medtronic expects revenue growth of 5 to 5.5 percent and full-year adjusted earnings of $4.36 to $4.40 a share. The company said earnings per share would be as much as 45 to 50 cents higher if not for the negative foreign currency impact.
In its third quarter, Medtronic took a $344 million hit on revenue due to currency fluctuations and the company is forecasting the fourth quarter impact to fall between $180 million to $220 million.
In 2015, Ishrak was chosen as TCB’s Person of the Year.