On Feb. 20, medical technology company Medtronic (NYSE:MDT) released third-quarter earnings for the period ended Jan. 26.

  • Sales increased by 10%, thanks to double-digit revenue growth in five of seven major business segments and the positive impact of foreign currency translation.
  • Because of product mix shift and an increase in SG&A expenses (which was offset by manufacturing efficiencies and cost-controlling initiatives), operating margin declined by 240 bps.
  • The company repurchased approximately 10 million shares of common stock worth $438 million in the nine months ended Jan. 26.
  • For fiscal 2007, Medtronic expects revenue in the range of $12.2 billion to $12.4 billion and EPS of $2.34 to $2.38.

(Figures in millions, except per-share data)

Income Statement Highlights

Q3 2007

Q3 2006

Change

Sales

$3,048

$2,770

10.0%

Net Profit

$710

$670

6.0%

EPS

$0.61

$0.55

10.9%

Diluted Shares

1,163.7

1,222.8

(4.8%)



Get back to basics with a look at the income statement.

Margin Checkup

Q3 2007

Q3 2006

Change*

Gross Margin

74.6%

74.8%

(0.2)

Operating Margin

29.5%

31.8%

(2.4)

Net Margin

23.3%

24.2%

(0.9)

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q3 2007

Q3 2006

Change

Cash + ST Invest.

$3,321.0

$4,926.8

(32.6%)

Accounts Rec.

$2,626.0

$2,364.6

11.1%

Inventory

$1,319.0

$1,177.2

12.0%



Liabilities

Q3 2007

Q3 2006

Change

Accounts Payable

$345.0

$310.9

11.0%

Long-Term Debt

$5,577.0

$1,002.5

456.3%



Learn the ways of the balance sheet.

Cash Flow Highlights

YTD 2007

YTD 2006

Change

Cash From Ops.

$2,054

$1,512

35.8%

Capital Expenditures

$479

$1,136

(57.8%)

Free Cash Flow

$1,575

$376

318.9%

Capital expenditures includes the purchase of intellectual property, plant, and equipment.

Find out why Fools always follow the money.

Related Companies:

  • Biomet (NASDAQ:BMET)
  • Boston Scientific (NYSE:BSX)
  • St. Jude Medical (NYSE:STJ)
  • Stryker (NYSE:SYK)
  • ZOLL Medical (NASDAQ:ZOLL)

Related Foolishness:

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