|Medtronic CEO Omar Ishrak|
Medtronic ($MDT) raked in $4.5 billion in revenue last quarter, riding a jump in international sales to 4% growth, but a spike in charges brought net profits down 2%.
The company reported net income of $969 million, down from $991 million in the same period last year, a decline Medtronic blames on a $182 million restructuring charge stemming from about 2,000 worldwide job cuts designed to save the company $225 million per year.
But Medtronic had lots of good news to tout in its earnings, as its long-troubled Cardiac Rhythm Disease Management business grew 3% to $1.332 billion, fueled by 8.7% international growth for pacemakers that notched Medtronic its highest European market share in more than two years, the company said.
In the U.S., Medtronic's ICD unit grew about 1.9% on the quarter, and spine revenue, another sore spot for the devicemaker, grew just about .4%. While those figures are small, Medtronic's fiscal fourth quarter marks the first time those two business have grown concurrently in 4 1/2 years, Medtronic CEO Omar Ishrak said on a conference call.
And Medtronic's historically healthy units continued their climb, as coronary revenue grew 3% to $465 million while neuromodulation leapt 7% to $492 million and surgical technologies swelled 10% to $407 million.
Ishrak has long said a pillar of Medtronic's future lies in capitalizing on emerging markets, and the company increased those revenues 13% to $521 million, good for 12% of total sales. The CEO's goal is to derive 20% of sales from emerging markets by 2016.
Medtronic is expecting fiscal 2014 revenue growth between 3% and 4% on a constant currency basis, making for up to $17.3 billion in annual sales. The company is expecting the tough markets for defibrillators and spinal implants to stabilize throughout the year, CFO Gary Ellis said on the call, and Medtronic expects to lose about $120 million to the medical device tax on the year.
However, the increasing global adoption of Medtronic's CoreValve heart implant and Symplicity renal denervation will pad revenues as the company prepares to launch both devices in the U.S. in 2015, Ishrak said.
"We few fiscal 2014 as a pivotal year, as we work toward bringing transcatheter heart valves and renal denervation to the U.S. market, which we believe present a long-term transformational opportunity," Ishrak said.
- read Medtronic's statement
- check out the full results (PDF)
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