Medtronic income drops 38%, despite slight revenue increase
The first quarter net earnings were $445 million, decreasing 38 percent over the same period in the prior year that totaled $723 million, according to the Minneapolis-based Medtronic. The company attributed its losses to restructuring and a one-time charge that resolved outstanding intellectual-property litigation with Abbott Laboratories, along with the impact of adopting a new accounting standard for non-cash interest expense on convertible debt.
The company reported first quarter revenue of $3.93 billion, a 6 percent increase, compared to the $3.71 billion reported a year ago. Revenue outside the United States of $1.54 billion grew 6 percent, compared to the same period last year, or 16 percent on a constant currency basis, accounting for 39 percent of its worldwide revenue. Also, Medtronic noted that this quarter contained 14 weeks, one more week than previous year’s first quarter.
Cardiac rhythm disease management (CRDM) revenue of $1.34 billion grew nearly 3 percent. Revenue from implantable cardioverter defibrillators was $775 million, while pacing revenue was $536 million in the quarter, compared to 2008 first quarter earnings of $764 million and $526 million, respectively. Outside the U.S., the company said its CRDM revenue grew 10 percent, driven by growth in Europe and China.
According to Medtronic, its cardiovascular division revenue of $689 million grew 9 percent. Growth in the cardiovascular business was driven by strong global performance in both the endovascular and structural heart disease lines, which grew 41 percent and 16 percent, respectively. Its coronary line, which includes the Endeavor drug-eluting stent, grew slightly to $353 million from $349 million in the 2009 first quarter.
Subsidiary Physio-Control of Redmond, Wash., reported $97 million in revenue, up 3 percent from $94 million in the previous year first quarter, which the company attributed to the launch of the Lifepak 15 monitor/defibrillator.
Diabetes revenue of $295 million grew 10 percent on strong U.S. insulin pump and continuous glucose monitoring product sales, as well as sales of consumables in Europe, according to the company. International sales grew 14 percent over the same quarter last year.