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Medtronic Reports Q3 Fiscal 2009 Results

Medtronic, Inc. (Medtronic) has reported revenue of $3.494 billion for the third quarter of fiscal 2009, up 3%, compared with the revenue of $3.405 billion in the year-ago quarter. It reported net earnings of $723 million, or $0.65 per share, for the third quarter of fiscal 2009, compared with the net earnings of $77 million, or $0.07 per share, in the year-ago quarter.

Revenue outside the US grew to $1.318 billion (38% of total revenue for the quarter), a one percent increase or a nine percent increase after adjusting for the impact of foreign currency.

After adjusting for in-process research and development charges of $72 million, or $0.06 per share, non-GAAP net earnings and diluted earnings per share in the period were $795 million, or $0.71 per diluted share, an increase of 12 percent and 13 percent, respectively.

“Despite global macroeconomic uncertainties and an unfavorable impact from foreign currency on our business units this quarter, Medtronic continues to deliver growth in a challenging environment,” said Bill Hawkins, Medtronic chairman and chief executive officer. “Excluding the impact of foreign currency, four of our seven business units reported double digit revenue growth in the quarter and we continue to focus on delivering meaningful operating leverage.”

Cardiac Rhythm Disease Management

Cardiac Rhythm Disease Management (CRDM) revenue of $1.169 billion decreased four percent in the quarter or one percent after adjusting for an unfavorable $38 million foreign exchange impact. Worldwide implantable cardioverter defibrillator revenue was $694 million. Worldwide pacing revenue was $457 million. In February, the CRDM business announced the acquisition of Ablation Frontiers, which when combined with the previously announced acquisition of CryoCath Technologies, positions CRDM as a leader in the atrial fibrillation market.

Spinal

Spinal revenue of $832 million grew three percent or four percent after adjusting for an unfavorable $11 million foreign exchange impact. In the quarter, the core spinal business grew five percent on further adoption of its Legacy, Atlantis and MAST product portfolios. The Biologics business also stabilized in the quarter.

CardioVascular

Revenue in the CardioVascular business grew to $565 million, an increase of 10 percent or 16 percent with an unfavorable $27 million foreign exchange impact. Coronary stent revenue grew 25 percent and Endovascular revenue grew 49 percent on a constant currency basis. The commercial launch and availability of five new angioplasty products on a rapid exchange delivery system in the U.S. fueled growth in the CardioVascular business.

Neuromodulation

Neuromodulation revenue of $354 million grew 11 percent or 13 percent after adjusting for an unfavorable $9 million foreign exchange impact. Growth in pain management, gastro/urology and movement disorder product lines continue to drive this business.

Diabetes

Diabetes revenue of $277 million grew seven percent or 12 percent after adjusting for an unfavorable $12 million foreign exchange impact. Diabetes revenue grew on strong sales of durable pump and continuous glucose monitoring systems as well as solid performance in markets outside of the United States.

Surgical Technologies

Surgical Technologies revenue of $207 million grew six percent or 10 percent after adjusting for an unfavorable $8 million foreign exchange impact. Sales of Navigation equipment including the Fusion Image Guidance Surgery System and O-Arm Imaging System continue to be strong in addition to positive growth in service revenue associated with the equipment.

Physio-Control

Physio-Control reported $90 million in revenue, a decrease of four percent or an increase of one percent after adjusting for an unfavorable $5 million foreign exchange impact.