DUBLIN: Medtronic PLC reported on Thursday that revenue climbed in its latest quarter while adjusted earnings were slightly better than expected, as results were propelled by its acquisition of Covidien PLC.
Thursday’s report marks the third round of results since the device manufacturer’s $50 billion acquisition of Covidien closed in January. The Covidien 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 reduces the company’s tax burden.
Overall for the latest quarter, Medtronic reported a profit of $520 million, or 36 cents a share, down from $828 million, or 83 cents, a year earlier. The decline, the company said, was due mainly to tax-related adjustments linked to the Covidien acquisition. Excluding special items, adjusted earnings were $1.03 a share.
Revenue was $7.06 billion, a 6% increase on a constant-currency basis that includes Covidien in year-earlier results, and a rise of 62% on an unadjusted basis.
Analysts had expected adjusted earnings of $1 a share on revenue of $7.06 billion.
In the latest quarter, the minimally invasive therapies group, formerly the Covidien Group, posted sales of $2.36 billion, up 3%.
U.S. revenue, which represents 58% of the company’s top line, grew 6%.
In the latest quarter, revenue from Medtronic’s cardio-and-vascular group segment was $2.48 billion, an increase of 8% on a comparable basis. Revenue from the restorative-therapies group rose 5% on a comparable basis to $1.77 billion. Sales in the diabetes group grew 11% on a comparable basis to $450 million.
The company updated its revenue outlook and said that for the second half of its 2016 fiscal year it expects to land in the upper region of its mid-single-digit revenue growth range.
And based on the first half of the fiscal year, the company now expects fiscal year 2016 adjusted earnings in the range of $4.33 to $4.40, from a previous range of $4.30 to $4.40.
