Medtronic Conference Call Highlights

Medtronic

reported its fourth quarter earnings on Monday. Shares of the company are up four percent. Below are some key highlights from its conference call: Performance Metrics: • We reported second quarter revenue of $4.4 billion, which represents growth of 5%, and Q2 non-GAAP diluted earnings per share of $0.96, growing 5%. • Q2 was a strong balanced quarter where revenue growth was at the upper end of our outlook range for the fiscal year and within our mid-single-digit baseline goal. • Our performance was well balanced across our three groups with two largest groups, CVG and RTG. • Delivering mid-single digit revenue growth and diabetes achieving double-digit growth. • Our Q2 results were also balanced from a geographic perspective with 5% growth in both the U.S. and international markets. • Looking ahead, we expect that our three primary strategies, therapy innovation, globalization, and economic value, coupled with our increasing market diversification will enable us to consistently deliver dependable growth in healthcare. • In addition, we believe our pending acquisition of Covidien will further strengthen and balance our growth profile. • As we have done previously we are quantifying, communicating, and executing each independent growth factors. • Our new therapies growth factor contributed 310 basis points to our overall growth in Q2. • This is over 100 basis points higher than last quarter and at the upper half of our previously stated 150 to 350 basis point expected range. • Our organization continues to bring forward new products and services, which are being received enthusiastically by customers around the world. Financial Metrics: • Second-quarter revenue of $4.366 billion increased 4% as reported or 5% on a constant-currency basis after adjusting for a $38 million unfavorable impact from foreign currency. • Q2 revenue results on a geographic basis were as follows. • Growth in the emerging markets was 12% and represented 13% of overall sales. • The U.S. grew 5% and represented 56% of overall sales and growth in non-U.S. developed markets was 2% and represented 31% of our overall sales. • Q2 diluted earnings per share on a non-GAAP basis were $0.96, an increase of 5%. • Q2 GAAP diluted earnings per share were $0.83, a decrease of 7%. • This quarter's GAAP to non-GAAP adjustments on an after-tax basis included a $64 million multiyear. • In June, data from the crystal AF trial were published in the New England • Journal showing that in patients with recent cryptogenic strokes, our retail monitor detected AF better when compared to standard care. • We continue to make progress on global clinical trial for Micra and expect CE Mark by the end of this fiscal year with U.S. approval in FY 2017. • In our Coronary and Structural Heart business, revenue of $743 million grew 6%. • Coronary declined 2% although our drug-eluting stent share remained stable in the United States and was up slightly in international markets. • Revenue of $1.650 billion grew 4%. • Results were driven by growth in surgical technologies, neuromodulation, and BMP. Spine revenue of $746 million grew 1%. • Core Spine growth was flat year-over-year, a modest improvement from last quarter. • BMP sales of $120 million grew 9% with stable underlying demand. • We continue to expect FY 2015 non-GAAP diluted earnings per share in the range of $4 to $4.10. • Based on current exchange rates this implies earnings per share growth in the range of 7% to 10% on a constant currency basis after taking into account the currently expected $0.08 to $0.09 of negative foreign currency impact to earnings.