Medical technology company Medtronic plc (MDT) reported better than expected results for the first quarter of 2019. Encouraged by the impressive results, the company raised its sales guidance for the full fiscal year. As a result, the stock gained more than 4% in the premarket after the announcement.
Adjusted net income advanced to $1.6 billion or $1.17 per share in the June quarter from $1.42 billion or $1.03 per share in the year-ago quarter. Continuing the recent trend, the bottom-line came in above Wall Street estimates. Reported earnings were $1.08 billion or $0.79 per share.
At $7.4 billion, net sales were broadly unchanged from the first quarter of 2018, but exceeded expectations. US revenue declined 4.4%, while non-US revenues in developed and emerging markets rose 4% and 7.6% respectively. Total organic sales, mainly adjusted for the sale of certain businesses last year, moved up 6.8%.
While all the major business segments registered sales growth, total revenues particularly benefitted from a 26.3% increase in the Diabetes division.
“We are executing against our plan, growing our markets and driving share gains across multiple businesses and geographies. Our execution is not only on the top line, but also down the P&L, as we delivered margin expansion through our Enterprise Excellence program while increasing our investment in R&D,” said CEO Omar Ishrak.
All the major business segments registered sales growth, led by a 26% growth in the Diabetes division
The company revised up its organic revenue growth target to 4.5-5% from the earlier outlook of 4-4.5%. As per the revised forecast, full-year adjusted earnings are expected to grow between 9% and 10%, compared to the previous guidance of an 8-9% increase. Meanwhile, the management reaffirmed its adjusted earnings outlook in the $5.10-$5.15 per share range.
Johnson & Johnson, the market-leading healthcare products and services firm, last month reported above-consensus results for its second quarter, aided by robust Medical Devices sales and double-digit growth in the Pharma segment.
Medtronic shares gained about 10% since the beginning of the year, outperforming the market. Following Tuesday’s earnings release, the stock gained more than 4% in premarket trading, paring some of the losses it suffered last week.