Medtronic sales increasingly flee overseas as company chases growth

For all of the talk about how American healthcare reform and changes at the Food and Drug Administration will impact Medtronic Inc. (NYSE: MDT), perhaps it’s time to shift our focus beyond the United States.

Judging by its latest earnings report, the country’s largest medical device maker certainly has. Overall, Medtronic said fiscal 2010 revenue rose 8 percent to $15.8 billion from the previous year. Most of the growth came from international sales, which jumped 15 percent compared to just 4.2 percent in the United States.

There’s no question where Medtronic is heading. International sales now make up 41 percent of overall revenue. Assuming Medtronic maintains its current growth rates, international will overtake domestic operations in just four years. By 2015, international operations will account for 53 percent of the company’s overall revenue versus 47 percent in America.

Break down the numbers further and you will see Medtronic’s international sales by product category, with the exception of diabetes, grew at least twice as fast as its American counterparts. International cardiovascular revenue is growing about seven times faster than in the U.S.

Cardiac Rhythm Management (pacemakers, ICDs) — 3.6 percent

Spinal — flat

Cardiovascular (heart valves, peripheral stents) — 4 percent

Neurostimulation — 6.5 percent

Diabetes — 10 percent

International

Cardiac Rhythm Management — 7 percent

Spinal — 13.5 percent

Cardiovascular — 27 percent

Neurostimulation — 14.2 percent

Diabetes — 13 percent

Medtronic has seen the future and it looks quite foreign.