Medtronic Inc. Earnings Cheat Sheet: Tighter Margins as Net Income Falls

S&P 500 (NYSE:SPY) component Medtronic Inc. (NYSE:MDT) reported its results for the first quarter. Medtronic, Inc. provides products and therapies for medical professionals to meet the healthcare needs of their patients.

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Medtronic Earnings Cheat Sheet for the First Quarter

Results: Net income for the medical appliances and equipment company fell to $821 million (77 cents per share) vs. $830 million (76 cents per share) a year earlier. This is a decline of 1.1% from the year earlier quarter.

Revenue: Rose 7.3% to $4.05 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: MDT reported adjusted net income of 79 cents per share. By that measure, the company fell in line with the mean estimate of 79 cents per share. Analysts were expecting revenue of $3.98 billion.

Quoting Management: “Our first quarter results showed growth across many of our businesses. The major exceptions were ICDs and spinal products, where we continued to face challenges,” said Omar Ishrak, Medtronic chairman and chief executive officer. “My top priority is aligning the management team around improving execution and optimizing sources of growth.”

Key Stats:

Gross margin shrank 1.2 percentage points to 75.2%. The contraction appeared to be driven by increased costs, which rose 12.7% from the year earlier quarter while revenue rose 7.3%.

Revenue has risen the past four quarters. Revenue increased 2.4% to $4.29 billion in the fourth quarter of the last fiscal year. The figure rose 2.9% in the third quarter of the last fiscal year from the year earlier and climbed 1.7% in the second quarter of the last fiscal year from the year-ago quarter.

The company has now seen net income fall in each of the last two quarters. In the fourth quarter of the last fiscal year, net income fell 18.7% from the year earlier quarter.

The company fell in line with estimates last quarter after missing forecasts in the previous quarter with net income of 90 cents versus a mean estimate of net income of 93 cents per share.

Competitors to Watch: Boston Scientific Corp. (NYSE:BSX), St. Jude Medical, Inc. (NYSE:STJ), Edwards Lifesciences Corp (NYSE:EW), Johnson & Johnson (NYSE:JNJ), ZOLL Medical Corporation (NASDAQ:ZOLL), Abbott Laboratories (NYSE:ABT), Stryker Corporation (NYSE:SYK), Integra LifeSciences Hldgs. Corp. (NASDAQ:IART), CONMED Corporation (NASDAQ:CNMD), and Greatbatch Inc. (NYSE:GB).

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(Source: Xignite Financials)

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