Medtronic beats Q3 estimates and raises full-year guidance

Medtronic plc (MDT) topped consensus estimates on revenue and earnings for the third quarter of 2019 and raised its earnings guidance for fiscal year 2019. Shares were up 0.79% in premarket hours on Tuesday.

Worldwide revenues totaled $7.5 billion, up 2.4% from the same period last year. On an organic basis, revenues grew 4.4%.

On a GAAP basis, the company reported a net income of $1.26 billion, or $0.94 per share, compared to a net loss of $1.38 billion, or $1.03 per share, in the year-ago quarter. Adjusted net income rose 10% to $1.75 billion, or $1.29 per share.

US revenue, which made up 53% of company revenue, grew 2.3% on a reported basis during the quarter. Non-US developed market revenue grew 0.6% on a reported basis and 3.6% on a constant currency basis. Emerging market revenue rose 6.8% on a reported basis and 13.9% on a constant currency basis.

During the quarter, revenues in the Cardiac and Vascular Group (CVG) dropped 0.5% on a reported basis. On a constant currency basis, revenue grew 1.6%, driven by mid-single digit growth in the Aortic, Peripheral & Venous and Coronary & Structural Heart divisions, offset by low single-digit declines in the Cardiac Rhythm & Heart Failure segment.

Also see: Medtronic Q3 2019 Earnings Conference Call Transcript

In the Minimally Invasive Therapies Group, revenues grew 4.1% as reported and 6.6% on a constant currency basis, driven by strong performance in all divisions. In the Restorative Therapies Group, revenues rose 4.2% as reported and 5.5% on a constant currency basis, driven by growth in all business units, except Spine. Revenues in the Diabetes Group increased 4.5% as reported and 6.5% in constant currency.

For fiscal year 2019, Medtronic expects organic revenue to grow 5.25% to 5.5% versus the prior outlook of 5% to 5.5%. The company raised its adjusted EPS guidance to a range of $5.14 to $5.16 from the previous range of $5.10 to $5.15. The outlook for free cash flow was also raised to a range of $5 billion to $5.2 billion from the previous range of $4.7 billion to $5.1 billion.

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