Medtronic’s Profit Slides 26% on Legal Expenses
Medtronic, Inc., on Tuesday reported a steep decline in quarterly profits, attributing the drop to significant legal expenses and the impact of foreign currency rates.
The Fridley-based med-tech giant said that earnings totaled $646 million, or 63 percent per share, for the quarter that ended October 26. That’s down roughly 26 percent and 23 percent, respectively, compared to the same period a year ago.
Medtronic attributed the sharp decline in profits in large part to a one-time $245 million charge related to litigation in its structural heart business. The charge stems from a $74 million jury verdict that Edwards Lifesciences Corporation previously won in a patent case against Medtronic, and that was recently affirmed by the U.S. Court of Appeals, according to a report by the Star Tribune.
Excluding those litigation expenses and certain other charges, the company said that its second-quarter earnings totaled $902 million, or 88 cents per share. Adjusted earnings matched the expectations of analysts polled by Thomson Reuters.
Revenue, meanwhile, totaled $4 billion, up 2 percent from the same period a year ago. Excluding the impact of foreign currency rates, sales jumped 5 percent during the quarter, the company said.
Shares of Medtronic’s stock were trading up about 1.4 percent at $42.39 Tuesday afternoon.
Medtronic Chairman and CEO Omar Ishrak said in a statement that the company’s second-quarter performance “reflects the results of our ongoing focus to deliver consistent and dependable growth in a changing health care environment.”
“Our growth was broad-based across several businesses and geographies, driven by continued stabilization of our end markets and the ongoing successful execution of new product launches,” he added.