Medical device maker Medtronic’s profit beats estimates


Medical device maker Medtronic Plc reported a better-than-expected quarterly profit on Thursday, helped by higher sales in all of its divisions, and the Dublin-based company raised the lower-end of its full-year profit forecast.

The world's largest stand-alone medical device maker, whose shares were up 1.5 percent in premarket trading, also said it expected fiscal 2016 revenue to increase by a high mid-single digit percentage. It had earlier forecast growth of 4-6 percent.

Medtronic, known for its pacemakers, said it now expected an adjusted profit of $4.33-$4.40 per share for 2016.

Analysts on average were expecting a profit of $4.36 per share, according to Thomson Reuters I/B/E/S.

An improving U.S. economy and the impact of the Affordable Care Act – popularly known as Obamacare – has increased the number of surgical procedures, boosting demand for Medtronic's products.

Sales generated by surgical products provider Covidien, which Medtronic bought in January for nearly $50 billion, contributed about a third of the company's total revenue in the second-quarter ended Oct. 30.

Medtronic said device sales in the United States increased 6 percent and accounted for more than half of the company's revenue in the latest quarter.

Revenue rose 62 percent to $7.06 billion, including sales from Covidien, matching the average analyst estimate.

The company's adjusted profit of $1.03 per share beat the average analyst estimate by 3 cents.

The adjusted profit included a charge of 4 cents per share related to the integration of Covidien's business, which Medtronic calls its Minimally Invasive Therapies Group.

Medtronic's net profit fell to $520 million, or 36 cents per share, from $828 million, or 83 cents per share, a year earlier, mainly due to higher restructuring charges.

The company's shares were trading at $77.25 in premarket trading, after closing at $76.11 on Wednesday.