Medtronic (NYSE: MDT) didn't have the most impressive fourth-quarter results when the company reported in May. Revenue was only up 0.02%, and earnings dropped nearly 19%. But those results were good enough to beat Wall Street estimates, and Medtronic's share price has steadily risen since May.
The medical device giant announced its fiscal 2020 first-quarter results on Tuesday before the market opened. This time around, Medtronic yet again made investors happy. Here are the highlights from the company's Q1 update.
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By the numbers
Medtronic reported revenue in the first quarter of $7.49 billion. This reflected a 1.5% increase from the prior-year period revenue total of $7.38 billion. The consensus among Wall Street analysts was for Q1 revenue of $7.4 billion.
The company reported net income of $864 million, or $0.64 per share, based on a generally accepted accounting principles (GAAP). This was lower than the GAAP net income of $1.016 billion, or $0.74 per share, recorded in the same period in 2018.
Medtronic stated that its adjusted net income in the first quarter totaled $1.7 billion, or $1.26 per share. This reflected an improvement from the adjusted net income of $1.6 billion, or $1.17 per share, reported in the prior-year period. It was also well above the consensus analysts' adjusted earnings estimate of $1.18 per share.
Behind the numbers
The medical device company's revenue took a hit somewhat from currency fluctuations. Medtronic said that it experienced a $146 million negative impact from foreign currency. On a constant currency basis, the company's revenue grew by 3.5% year over year.
Medtronic's diabetes group performed the best among its business units in the first quarter, with revenue climbing 3.5% year over year to $592 million. Growth for its restorative therapies group wasn't too far behind, with the unit posting sales of $2.012 billion, up 3.2% from the prior-year period. In addition, Medtronic's minimally invasive therapies group saw sales rise 2.3% year over year to $2.1 billion.
However, the company's cardiovascular group reported sales of $2.79 billion, down 0.7% from the prior-year period. Although the unit's coronary and structural heart revenue increased by 2.6% year over year, sales for its cardiac rhythm and heart failure and its aortic, peripheral, and venous products slipped from the first quarter of fiscal 2019.
Medtronic's GAAP net income fell from the prior-year period primarily due to a significantly higher interest expense. However, much of this higher interest expense was added back with the company's adjusted net income figure, contributing to year-over-year improvement on a non-GAAP basis.
Medtronic reaffirmed its previous full-year fiscal 2020 revenue guidance of growth of around 4% on an organic basis. The company also boosted its full-year non-GAAP earnings guidance. Medtronic now anticipates non-GAAP earnings per share (EPS) to be between $5.54 to $5.60, up $0.10 from its previous guidance of $5.44 to $5.50.
CEO Omar Ishrak stated that Medtronics is "excited about what lies ahead, as we expect the investments we've made in our pipeline to begin to pay off with multiple pipeline catalysts, accelerating revenue growth, and value creation for our shareholders."
This article was originally published on Fool.com