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Medtronic Hits Record High After Earnings

Shares of Dublin-based Medtronic, a medical device maker, hit a record high after the company reported a better than expected quarterly profit.

Medtronic reported fiscal first quarter 2019 results that revealed net income of $1.08 billion, or 79 cents a share. This is compared with net income of $1.02 billion, or 74 cents a share, reported a year ago. Excluding non-recurring items, adjusted earnings per share for the company rose 4% to $1.17, beating the $1.11 that analysts had expected.

The company, which is the largest U.S. standalone device maker’s diabetes unit that makes insulin pumps and glucose monitoring systems, saw a 27 percent rise in sales, largely due to strong adoption of its artificial pancreas device in the U.S.

Medtronic’s top-selling cardiac and vascular unit that makes defibrillators, pace-makers, heart valves and stents saw revenue of $2.81 billion, beating analysts’ estimate of $2.77 billion, according to Thomson Reuters I/B/E/S.

CEO Omar Ishrak said during the earnings call, “Revenue grew 6.8% on an organic basis marking the third straight quarter of 6.5% or better organic revenue growth, with strong growth across all four groups and regions. Operating profit grew 7% and non-GAAP diluted EPS grew 13.6% pro forma and 8.7% adjusted for currency.”

“We are executing against our strategies. We are growing our markets and driving share gains across multiple businesses and multiple geographies. Businesses that were challenged 12 months ago are now headed in the right direction as evidenced for the past three quarters. We continue to execute in emerging markets and with our differentiated programs that deliver improved economic value to payers and providers. Our execution is not only in the top line, but also down the P&L. We delivered margin expansion for our Enterprise Excellence program, whether increasing our investment in R&D to fuel future growth.”

“The diabetes segment is the fastest growing segment in the company and there is a lot of momentum in this franchise,” remarked BMO Capital Markets analyst Joanne Wuensch.

Evercore ISI analyst Vijay Kumar said, “What impressed us was the solid all-around performance across all the segments, and growth was balanced across geographies.”

It was also recently revealed that Medtronic (MDT) director Richard H. Anderson, who is the president and chief executive of Amtrak, bought $250,000 in shares of the medical-devices firm on the open market.

Anderson is the only Medtronic insider to do so in the last two calendar years. He purchased 2,600 Medtronic shares for an average price of $95.88 each, according to a filing he made with the Securities and Exchange Commission. .

‘We are excited about the growth opportunities in our end markets, and we are bullish about our competitive position,” said Ishrak.

“Our pipeline of innovation, invention, and disruption has never been stronger. We are also putting the pieces in place to improve free cash flow conversion, creating additional capital that can be returned to shareholders and reinvested to drive future growth, all with a goal of creating long-term shareholder value.”

Shares of the stock have seen a gain of over 11% YTD.

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