Medtronic Revenue Continues to Grow on Acquisition

Medtronic PLC gave a rosy revenue outlook for the year and reported better-than-expected growth in its fourth quarter, helped by its acquisition of Covidien PLC.

For 2017, the company expects revenue to grow 5% to 6%, above analysts' expectations for 3% growth. Medtronic expects adjusted earnings of $4.60 to $4.70 a share, compared with analysts' expectations for $4.70 a share.

Medtronic's results have taken a boon in recent quarters from the device manufacturer's $50 billion acquisition of Covidien. A year out from the deal's close, Tuesday's report marks the first quarter in which the medical device maker's results are included in both quarters.

In all for its fiscal fourth quarter, Medtronic reported a profit of $1.1 billion, or 78 cents a share, compared with a loss of $1 billion, or flat, a year earlier. Excluding certain items, adjusted earnings were $1.27 a share, edging above analysts' expectations for $1.26 a share.

Revenue rose 3.6% to $7.57 billion. The company said revenue rose 6% excluding a $179 million dent from foreign currency, better than its projection for revenue growth for the fourth quarter between 5% and 5.5% on a constant-currency basis.

In the latest quarter, the minimally invasive therapies group, formerly the Covidien Group, posted sales of $2.46 billion, a 3% increase, or a 6% increase on a constant-currency basis, helped by "above-market growth" in surgical solutions.

Revenue in Medtronic's cardio-and-vascular group segment grew 5% to $2.74 billion, or 8% on an adjusted basis, driven by growth across all three of its divisions.

The restorative-therapies group posted revenue growth of 1% to $1.88 billion, or 3% on an adjusted basis, on strong growth in neurovascular and surgical technologies and improved results in spine.

Sales in the diabetes group grew 6% to $496 million, or an adjusted 10%.

Shares, inactive premarket, have added 5.6% over the past three months.

The Covidien acquisition involved Medtronic reincorporating from Minneapolis to Dublin, a so-called inversion deal that reduces the company's tax burden. Medtronic Inc. said last month the Treasury Department's new proposed tax regulations on inversion deals won't have a material financial impact on the medical supply company, which moved its corporate address abroad in the deal last year.

Write to Anne Steele at [e-mail]

(END) Dow Jones Newswires

May 31, 2016 08:15 ET (12:15 GMT)

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