Medtronic (NYSE: MDT) stocks notched a new record late Tuesday, soaring almost 3 percent in just one month - just what the company needed to allay concerns of a looming downfall in the medical device business.
Medtronic did not have the most stellar output in the fourth-quarter; its revenue only inched a measly 0.02 percent, and earnings were down almost 20 percent. But these figures were decent enough to exceed analysts' expectations.
Medtronic is the biggest medical device manufacturer in the world. It earns a huge chunk of its profits from the United States' healthcare market but is based in Ireland for tax purposes. The company has an executive office in Fridley, Minnesota.
The medical equipment firm disclosed its fiscal 2020 Q1 results late Tuesday prior to the opening bell. And for the first time in as many months, Medtronic gave a smile to investors' faces. Here is a quick overview of the company's first-quarter performance:
MDT posted $7.5 billion in total sales in the first three months. This, on the heels of a 1.6 percent rally from the prior-year quarter revenue of $7.4 billion. Wall Street analysts' consensus MDT revenue for Q1 is $7.6 billion.
Medtronic registered a net income of $865 million, roughly $0.65/share, based on generally accepted accounting principles (GAAP). The figure was below its GAAP net income of $1.017 billion, or $0.75/share, reached in the same quarter last year.
The first quarter for Medtronic was very critical for the Irish company, Evercore ISI market strategist Vijay Kumar, said. Traditionally, the company's shares rev up as earnings season nears, "only to fall back as a result of so-called 'one-off items", Kumar -- who categorized the report as a "big boy print" -- said in a memo to investors.
The company's Diabetes Unit registered the biggest sales in all its business arms for the first three months, with revenue advancing 3.6 percent year-on-year to $593 million. Its Restorative Therapies unit also did fairly well, with $2.011 billion Q1 sales, rising 3.3 percent compared to the same quarter last year. MDT's cardiovascular unit, on the other hand, didn't perform as expected, with only $2.74 billion in profit, down 0.8 percent from the recent quarter.
Medtronic expects its guidance for profits to advance 4.2 percent organically next year. It hiked its earnings forecast by 10 cents at mid-point to $5.55-$5.61/share. Wall Street predicts its earnings to hit $5.48/share, on$31.45 billion total sales.
Omark Ishrak, Medtronics chief executive officer, said the company is thrilled to see what's in store for the future. "We expect investments that we have made to start paying off with multiple catalysts... and accelerating value creation for our stockholders," he said.
