This morning, one of the world's largest medical device makers, Medtronic (NYSE:MDT), reported its second-quarter earnings results, and you can literally and figuratively say, it pumped up its profits.
For the quarter, Medtronic reported a currency-adjusted sales improvement of 2.4% to $4.194 billion as net income soared 40% to $902 million, with one-time costs from last year removed. On an adjusted earnings basis, EPS climbed 2% to $0.91 from the year-ago period.
The real highlight of this report was Medtronic's overseas growth. Although it reported modest gains throughout many of its operating segments, international and emerging market revenue provided the bulk of its growth, with international sales rising 3% on an adjusted currency basis, and emerging market revenue soaring 11%.
The company's cardiac and vascular group, which represents 52% of total sales, and supplies devices like pacemakers, stents, and defibrillators, saw revenue rise 3% when adjusted for negative currency translation, but received a 5% constant-currency boost from its international segment. Revenue from implantable cardiac defibrillators, its structural heart segment, and its endovascular operations all rose 4% for the quarter when adjusted for negative currency translation.
In restorative therapies, which make up 38% of total revenue, sales growth was a bit weaker at a currency-adjusted 1%. Its spinal revenue proved to be the biggest drag, down 5% on a currency-adjusted basis while its smaller surgical technologies segment delivered an 11% increase in revenue. This shouldn't be a huge surprise as spinal device demand has been down across the board domestically for many of Medtronic's peers.
Finally, Medtronic's diabetes group delivered a 4% increase in sales, but the future looks promising in this relatively small segment with the late-quarter approval of its MiniMed 530, the first artificial pancreas insulin pump.
Looking ahead, Medtronic reiterated its previous full-year guidance which calls for revenue growth of 3%-4% on a constant currency basis and for EPS of $3.80-$3.85.