Market Overview

Medtronic Q4 Results Top Expectations, Provide Soft Guidance For Fiscal Year 2017


Medtronic plc (NYSE: MDT) reported profit for the fourth quarter compared to a net loss in the year-ago quarter. However, on an adjusted basis, its net income grew 7 percent driven by 4 percent increase in the top line. As a result, both earnings and revenue came in above the Street analysts' expectations.

Medtronic reported net income of $1.1 billion or $0.78 a share for the fourth quarter compared to a net loss of $1 million or break-even per share in the year-ago quarter. On a non-GAAP basis, its net income would have increased 7 percent to $1.8 billion and earnings by 9 percent to $1.27 a share in the most recent quarter. Street analysts expected the company to report earnings of $1.26 a share.

The company's revenue advanced 4 percent to $7.6 billion from $7.3 billion in the previous year quarter. This is also above the Street analysts' predictions of $7.49 billion.

Medtronic's chairman and CEO, Omar Ishrak, commented about the results, "Our organization once again successfully delivered strong, balanced revenue growth across our groups and geographic regions - growing above the market and exceeding our revenue growth projections. This quarter caps a transformative year for Medtronic, our first full year after closing the largest ever MedTech acquisition. I am pleased with the execution and focus of our teams around the world who delivered sustained revenue growth and exceeded our Covidien cost synergy commitments."

Moving ahead, the company expects adjusted earnings to be between $4.60 and $4.70 per share for the fiscal year 2017 including an expected $0.20 to $0.25 unfavorable foreign currency impact based on current exchange rates. Street analysts expect the company deliver earnings of $4.70 a share.

As far as revenue outlook is concerned, the company's baseline goal was to grow revenue in the mid-single digits consistently on a constant currency basis. Given current trends, it sees constant currency revenue growth to be in the upper-half of the mid-single digit range for the fiscal year 2017, which is in the range of 5 to 6 percent. However, it excluded the estimated unfavorable 1.5 percentage points impact from the extra selling week the company had in the first quarter of fiscal year 2016.

Ishrak also commented about the next fiscal year, "As we enter our new fiscal year, we look forward to delivering on our robust pipeline of products and services, expanding our global reach to serve more patients, and partnering with others around the world to develop new value-based business models. We believe that Medtronic can play a meaningful leadership role with others in healthcare that can lead to better outcomes for patients, while improving overall healthcare system performance."


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Posted-In: Earnings News Guidance