On Nov. 20, after the market-close, medical equipment maker Medtronic (NYSE:MDT) released fiscal second-quarter 2006 earnings for the period ended Oct. 27. Here are the quick and dirty details for the quarter.

  • Sales grew 11.2% to $3.1 billion, led by the spinal and navigation, vascular, and neurological segments.

  • Reported diluted earnings fell 11.9%, but management stated that earnings grew 13% after adjusting for stock option expensing and other one-time gains in last year's second quarter.

  • Year-to-date cash flow generation was strong, and free cash flow grew 33.7%, excluding the purchases of intellectual property.

  • Long-term debt jumped over five times from last year's quarter.

(Figures in millions, except per-share data)

Income Statement Highlights

Avg. Est.

Q2 2006

Q2 2005

Change

Sales

$2,970

$3,075

$2,765

11.2%

Net Profit

--

$681

$817

(16.6%)

EPS

$0.56

$0.59

$0.67

(11.9%)

Diluted Shares

--

1,159

1,223

(5.2%)

*13 weeks ended Oct. 27, 2006 and Oct. 28, 2005.

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

Margin Checkup

Q2 2006

Q2 2005

Change*

Gross Margin

74.15%

74.86%

(0.71)

Operating Margin

29.63%

27.67%

1.96

Net Margin

22.15%

29.55%

(7.40)

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q2 2006

Q2 2005

Change

Cash + ST Invest.

$3,605

$4,177

(13.7%)

Accounts Rec.

$2,590

$2,316

11.8%

Inventory

$1,318

$1,127

17%


Liabilities

Q2 2006

Q2 2005

Change

Accounts Payable

$319

$341

(6.4%)

Long-Term Debt

$5,487

$1,001

448%

Learn the ways of the balance sheet.

Cash Flow Highlights

YTD

YTD

Change

Cash From Ops.

$1,307

$1,019

$288

Capital Expenditures

$251

$229

$22

Free Cash Flow

$1,056

$790

$266

*Six months ended October 27, 2006 and October 28, 2005.
*Capex doesn't include intellectual property purchases or acquisitions.

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Related Companies:

  • Baxter (NYSE:BAX)
  • Boston Scientific (NYSE:BSX)
  • St. Jude Medical (NYSE:STJ)
  • Johnson & Johnson (NYSE:JNJ)

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Fool contributor Ryan Fuhrmann has no financial interest in any company mentioned. The Fool has an ironclad disclosure policy. Feel free to email him with feedback or to discuss any companies mentioned further.