Medtronic Expects Profit at High End of Outlook

By Chelsey Dulaney 

Medtronic PLC said Tuesday that it expects earnings in its April quarter to come in at the top end of its previous guidance, while the medical-device maker also reported a slight uptick in revenue for the period.

Medtronic's fiscal-fourth quarter, which ended April 24, was the first that included results from its $43 billion acquisition of Covidien PLC.

The deal, which combined two of the world's largest surgical-implant and hospital-supply companies, closed in late January after drawing scrutiny over a tax-lowering tactic criticized by U.S. government officials. The acquisition involved Medtronic reincorporating from Minneapolis to Dublin, a so-called inversion deal that lowers the company's tax burden.

Overall for the quarter, Medtronic said its preliminary revenue edged up to $7.3 billion from $7.26 billion a year earlier on a comparable basis. Excluding a $482 million currency impact, revenue would have been up 7%.

Analysts polled by Thomson Reuters had recently forecast $7.08 billion in revenue.

In the U.S., revenue grew 8% on a comparable basis.

Based on its sales performance in the quarter, Medtronic said it expects earnings to come in at the upper half of its range of $1.08 to $1.13 a share, excluding special items.

Analysts had forecast per-share earnings of $1.10.

Still, the company warned that currency fluctuations remain a headwind, and foreign exchange rates were lower than it had initially forecast in February.

The company expects to report full results for the quarter and give guidance for its newly-started fiscal year on June 2.

Write to Chelsey Dulaney at [e-mail]

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