Scalper1 News
Shares of medical-device giant Medtronic ( MDT ) dipped sharply Tuesday after its fiscal Q3 sales missed estimates, though earnings and guidance were in line with expectations. Medtronic’s earnings for the quarter ended Jan. 29 totaled $1.06 a share excluding one-time items, down 1% from the year-earlier quarter and matching the consensus number calculated by Thomson Reuters’ survey of analysts. Sales jumped 61% to $6.93 billion, though adjusted for last year’s buyout of Covidien, as well as foreign-exchange rates, sales increased just 6%. This was about $55 million below consensus. Medtronic affirmed its full-year guidance of $4.36 to $4.40 in EPS, which includes 45 to 50 cents of foreign-currency impact. It did not guide Q4 earnings but said sales should grow 5% to 5.5% excluding the foreign-currency impact, which it sees amounting to $180 million to $220 million. Leerink analyst Danielle Antalffy wrote that the sales miss was largely due to higher-than-expected foreign-exchange headwinds, but there were a few signs of trouble. “U.S. sales growth did slow a bit, coming in at 4% growth vs. our 6% projection and representing a deceleration from the 6% growth seen in (fiscal) Q2 2016 and the 14% growth seen in (fiscal) Q1 2016,” Antalffy wrote. “This slowing growth is likely in large part attributable to increasingly difficult comparables and, to us, doesn’t yet suggest an alarming signal of a broad-based slowdown. “Medtronic did deliver positive operating leverage quarter-over-quarter, with EBIT margins of 27.8% vs. 27.4% last quarter, but this improvement fell below guidance of 28.0%-28.5% and our 28.5% estimate. This now leaves the increasingly positive operating leverage story very much back-end-loaded, with Medtronic having to deliver Q4 operating margins of at least 33.5% to hit its prior guidance for 29%-31% as reported for full-year 2016.” Antalffy also noted that Medtronic’s competitors similarly missed sales estimates in the most recent quarter — among them St. Jude Medical ( STJ ), Boston Scientific ( BSX ) and Johnson & Johnson ( JNJ ) — making Medtronic’s quarter look good in comparison. Medtronic stock was down almost 5% in late-morning trading on the stock market today , near 74. The stock had been relatively buoyant during the market sell-off, closing Monday just a few percentage points below the 52-week high hit last March. Scalper1 News
Scalper1 News