Over the past quarter, Medtronic’s net income dropped nearly 44% compared to the same period last year—but that still outpaced what many expected, considering the wide-ranging effects of the coronavirus pandemic.
With many surgical procedures being postponed worldwide, the medtech giant brought in $6.507 billion in global revenue for the three months it lists as the first quarter of its 2021 fiscal year, down from the $7.493 billion seen the year before.
As reported, that number represents a decrease of 13.2%. But when considering the impacts of foreign currency exchanges, plus benefits from its acquisition of Titan Spine—as well as quirks in Medtronic’s fiscal calendar, which grant the company an extra week once every five to six years; and, in this case, the chance to bring in an extra $360 million to $390 million—those adjustments push the decline to 17%, all told.
Still, that downward slope is much smoother compared to the quarter before, which posted a 26% drop in revenue during the early phases of COVID-19’s global spread—and as much as a 60% decline in its U.S. sales on a weekly basis, at some points.
“We reported solid improvement from last quarter, and our results reflect a faster than expected recovery from the depths of the pandemic we saw back in April,” CEO Geoff Martha said. “Procedure volumes began to recover around the world, and we’re leveraging our pipeline of innovative products to drive share gains in a number of key businesses.”
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Medtronic’s restorative therapies group was hit the hardest, with a 15% reported decrease in revenue to $1.712 billion. This quarter also saw a reorganization of the group’s divisions, from four to three. Its neurosurgery and spine businesses were combined to form a cranial and spine technologies unit, while deep-brain stimulation and pain therapies were paired up in a new neuromodulation division. Meanwhile the company’s neurovascular businesses were moved to its specialty therapies arm.
Elsewhere, the cardiovascular and minimally invasive therapy groups didn’t fare much better, reporting 13% and 14% decreases respectively—even as sales of ventilators more than doubled, with 1,000 units produced per week by the end of June. The company said it is still seeing high demand for its Puritan Bennett ventilators, especially in emerging markets.
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Among its cardiac and vascular offerings, structural heart and coronary artery products decreased 17% as patients postponed stent and valve-replacement procedures. General surgery products, meanwhile, declined in the mid-twenties. In addition, the diabetes group saw a 5% revenue decrease, as many people delayed the purchase of a new insulin pump, the company said.
“We’re playing offense and finding a new gear at Medtronic,” Martha said, with the company garnering 130 international product approvals so far this calendar year. “We are driving toward faster and broader topline growth, not just as we emerge from the pandemic, but sustainable growth over the long-term.”