As Omar Ishrak prepares to take the reins starting June 13 from outgoing chief executive Bill Hawkins, he will have to manage a company that announced Tuesday that it had a record quarter in terms of revenue in its fiscal fourth quarter but profits still declined.
In the quarter ended April 29, Fridley, Minnesota-based Medtronic garnered revenue of $4.3 billion, up slightly from $4.2 billion in the same period a year ago. But profits fell to $776 million, or 72 cents per diluted share from $954 million, or 86 cents per diluted share. For the year, the company saw revenue increase to $15.9 billion, up from $15.8 billion. Profits were fairly flat at $3.1 billion, or $2.86 cents per diluted share.
On a non-GAAP diluted basis, Medtronic’s fourth quarter earnings was 90 cents, falling short of analyst expectations by 2 cents.
Medtronic’s Cardiac Rhythm Disease Management Group saw revenues decline 7 percent in the fourth quarter to $1.315 billion declined, continuing to be hurt by the defibrillator business, which was down 16 percent to $760 million. However, Medtronic has high hopes for the Protecta ICD which recently won U.S. regulatory approval. The company also hopes that this division will benefit from a new MRI-compatible pacemaker – the Revo SureScan – which also was recently introduced to the domestic market.
Other businesses performed as follows:
- CardioVascular fourth quarter revenue of $879 million grew 16 percent.
- Physio-Control fourth quarter revenue of $128 million decreased 4 percent.
- Spinal fourth quarter revenue of $875 million decreased 1 percent
- Neuromodulation fourth quarter revenue of $432 million increased 5 percent
- Diabetes fourth quarter revenue of $368 million grew 11 percent
- Surgical Technologies revenue surpassed $1 billion ($1.036 billion) for the year, the first time the business has achieved that milestone. For the fourth quarter,the business had $298 million in sales, up 9 percent growth
In the fourth quarter revenue from international markets grew 12 percent to $1.958 billion of which emerging market revenue was $397 million, a 24 percent jump.