Medtronic Reports Sales Jump, Sees Profit at High End of Guidance

MINNEAPOLIS (Minneapolis Star Tribune/TNS) -

Medtronic PLC said its revenue jumped 60 percent to $7.3 billion in its February-April quarter, the first to include results from its giant acquisition of the Irish-based surgical supplier Covidien.

That was better than analysts were expecting, and executives told investors to expect a profit at the high end of its previous guidance.

On a day when it would usually announce full quarterly results, Medtronic’s statement Tuesday focused chiefly on revenue as a first step for investors to understand the financial effect of the purchase, which resulted in moving the company’s legal headquarters from a Minneapolis suburb to Dublin.

The company said it would release its full results on June 2. It told investors that adjusted earnings per share would be at the upper end of its previously stated range of $1.08 to $1.13. Before the announcement, the consensus among analysts was $1.10 per share.

“As we look ahead to fiscal year 2016, we feel increasingly confident about our business outlook on an operational basis,” Gary Ellis, Medtronic’s chief financial officer, said in a statement.

Adjusted for currency swings and to include Covidien in year-ago figures, Medtronic’s sales rose 7 percent in the quarter ended April 24, the last of its fiscal year.

The company reported full-year revenue of $20.26 billion, a 19 percent jump over the previous year and a figure that includes Covidien results from the time the deal closed in early February.

Adjusted to include Covidien for the full 2014 fiscal year and the previous fiscal year for comparison, revenue jumped 6 percent to $28.2 billion.

Medtronic paid $49.9 billion for Covidien in a “transformational” acquisition. The deal created controversy because it was seen by some as motivated by a desire to lower the company’s corporate taxes by moving it out of the U.S.

Executives said Medtronic would benefit from complementary business strategies with Covidien and the promise of greater scale to meet future global health-care challenges. They continue to lead the company from Fridley, Minnesota.

The acquisition also created some pain for longtime shareholders in Medtronic, who had to pay capital-gains taxes on a one-to-one stock swap for their shares in the new Medtronic.

In trading Tuesday, Medtronic shares rose 97 cents, or 1.3 percent, to $78.44.