Medtronic posts across-the-board revenue gains after layoffs earlier this year

After cutting costs earlier this year—including through a rolling wave of worldwide layoffs—Medtronic is starting off its 2024 fiscal year with reports of single-digit sales growth across each of its business areas.

The medtech giant posted total revenue topping $7.7 billion for the three-month period ending with July, for a reported gain of 4.5% over the same quarter the year prior. Net income, however, fell nearly 15% to $791 million, down from $929 million.

But Medtronic also took this time to raise its outlook for the remainder of its fiscal calendar, projecting that the year’s final number will land at the top of its previously forecasted range, for reported growth of about 2.75% if foreign currency exchange rates hold steady.

“Our revenue outperformance and focus on expense management drove operating margin expansion and mid-single digit adjusted earnings growth this quarter," Chief Financial Officer Karen Parkhill said in the company’s announcement. “Given our first-quarter performance, including a 7-cent operational beat on the bottom line, and improved fundamentals, we're raising our full-year organic revenue growth and EPS guidance.”

This past April, Medtronic kicked off a plan to cut staff across the enterprise after seeing declining sales among its segments for the previous three quarters. With a global headcount of about 100,000 at the time, the company said that the process of notifying affected employees could take months, with final impacts varying by team, region and country. 

Though Medtronic has not disclosed the total number of staff let go, it previously described the efforts as “substantially completed” by the close of the last fiscal year and reported logging about $300 million in “restructuring charges primarily related to employee termination benefits” before the end of April. For the months of May, June and July, the company totaled about $54 million in net restructuring charges. April also saw the departure of Medtronic’s renal tech division, which was spun off to form a joint venture with DaVita Kidney Care dubbed Mozarc Medical. 

Meanwhile, Medtronic’s most recent quarter saw the launch of its MiniMed 780G insulin pump, as well as its pair of next-generation leadless Micra pacemakers

The company’s cardiovascular portfolio reported $2.85 billion in first-quarter revenue, for 5.5% growth, driven in part by 9.9% gains in its structural heart division with transcatheter aortic valve replacement sales increases in the U.S. and Japan.

In neuroscience, $2.22 billion in sales equated to a 4.9% increase over last year, with high single-digit gains in spine implant procedures and double-digit growth in sales of its Mazor robotics system.

Surgical, gastrointestinal endoscopy, respiratory and patient monitoring sales brought in a combined $2.04 billion, for a 5.5% boost. Medtronic said its Hugo robotic surgical platform continues to move through a U.S. pivotal trial in urology—and that the company still aims to drop its patient monitoring and respiratory businesses, “through a likely spinoff” in the latter half of the 2024 calendar year.

Finally, Medtronic’s diabetes revenue amounted to $578 million, for a 6.8% gain. Sales of the MiniMed 780G insulin pump have increased internationally in recent quarters while driving “low-30's growth in U.S. durable pump sales”—though “high-single-digit U.S. declines resulted from decreases” in continuous glucose monitoring and consumable sales due to installed base attrition, the company said.