Medtronic raised its sales growth outlook on Tuesday as the medical device company reported revenue that beat Wall Street’s expectations, including strong sales of diabetes devices and rapid commercialization of a new catheter that treats atrial fibrillation.
Medtronic reports higher quarterly revenue, raises its sales outlook for the year
Rapid commercialization of new treatments for atrial fibrillation and sales of diabetes devices help revenue climb 5%.
The Minnesota Star Tribune
November 19, 2024 at 3:13PM
CEO Geoff Martha said during a call with investors that the company’s momentum is building, as the most recent quarter marked the eighth in a row of organic revenue growth in the mid-single digits.
“We know that innovation matters, and innovation is what really is driving our growth today across multiple areas,” Martha said Tuesday during Medtronic’s quarterly earnings call with investors.
The company, based in Dublin, with operational headquarters in Fridley, saw its stock price drop about 3% in early morning trading Tuesday.
Medtronic, which employs about 10,000 people in Minnesota, reported an adjusted net profit of $1.62 billion on $8.4 billion in sales for its second quarter, which ended Oct. 25. Revenue grew by 5% on an organic basis since the same time last year.
The company’s diabetes group grew the most, generating $686 million in revenue, up 12.4% over the same time last year.
Sales for the company’s largest group, cardiovascular devices, rose by 6.1% to $3.1 billion. At the end of the quarter, the company announced the Food and Drug Administration approved its Affera system, which maps the heart and treats atrial fibrillation, a common heart arrhythmia, through radiofrequency ablation and pulsed field ablation in a single catheter.
The largest medtech companies in the world are racing to commercialize pulsed field ablation, which uses electric pulses to treat A-fib instead of technology that uses heating and cooling to treat the arrhythmia. Physicians say the new technology is a safer treatment.
“Our technology is helping to drive the rapid shift of the market to pulsed field ablation,” Martha said. “We’ve been significantly expanding our manufacturing capacity to meet this growing demand, and we’re well positioned as the only company with both single shot and focal PFA catheters.”
Medtronic’s adjusted net profit rose to $1.26 per share, a cent higher than the adjusted net profit of $1.25 reported for the same quarter last year, beating expectations of analysts polled by Yahoo Finance by a penny per share.
Medtronic narrowed its organic sales guidance for fiscal year 2025 to a range of 4.75% to 5%, from its previous range of 4.5% to 5%. It also narrowed its guidance for diluted adjusted EPS to $5.44 to $5.50, from a previous range of $5.42 to $5.50.
Martha said on the call that it’s too early to speculate on how potential tariffs during the next presidential administration would affect Medtronic, but the company is “preparing for different scenarios.” Less than 1% of Medtronic’s revenue comes from China imports, he said.
Last month, medtech competitors Boston Scientific and Abbott Laboratories lifted their outlook for adjusted profit last month. The medtech market is healthy, Martha said.
“We’re seeing good procedure growth and we think that’s steady going forward, really driven by innovation,” Martha said.
Rapid commercialization of new treatments for atrial fibrillation and sales of diabetes devices help revenue climb 5%.
