Medtronic (MDT) Tops Q4 EPS by 2c; Sees FY18 Constant Currency Revenue Growth of 4-5%

(Updated - May 25, 2017 6:56 AM EDT)

Medtronic (NYSE: MDT) reported Q4 EPS of $1.33, $0.02 better than the analyst estimate of $1.31. Revenue for the quarter came in at $7.92 billion versus the consensus estimate of $7.86 billion.

• Q4 Revenue of $7.9 Billion Grew 5% as Reported; 5% at Constant Currency
• Q4 GAAP Diluted EPS of $0.84; Q4 Non-GAAP Diluted EPS of $1.33
• FY17 Revenue of $29.7 Billion Grew 3% as Reported; Approximately 5% on a Constant Currency, Constant Week Basis
• FY17 GAAP Diluted EPS of $2.89; FY17 Non-GAAP Diluted EPS of $4.60
• FY17 Cash Flow from Operations of $6.9 Billion; FY17 Free Cash Flow of $5.6 Billion

"Our fourth quarter results were a strong finish to the fiscal year, with balanced, diversified growth across our groups and regions," said Omar Ishrak, Medtronic chairman and chief executive officer. "Fiscal year 2017 was a solid year overall for Medtronic. We delivered record revenue, made progress in each of our growth strategies, executed on our Covidien cost synergy commitments, generated strong free cash flow growth, and deployed our capital in line with our stated priorities, balancing the return of cash to our shareholders together with disciplined reinvestment in our businesses."

Guidance
The company today provided its initial fiscal year 2018 revenue and EPS growth guidance.

In fiscal year 2018, the company expects constant currency revenue growth to be in the range of 4 to 5 percent. While the impact of foreign currency is fluid, if current exchange rates remain similar for the remainder of the fiscal year, the company's revenue would be positively affected by approximately $75 million to $175 million for the fiscal year, including an approximate negative $10 to negative $60 million impact in the first fiscal quarter.

In fiscal year 2018, the company expects diluted non-GAAP EPS growth to be in the range of 9 to 10 percent on a constant currency basis. Assuming current exchange rates remain similar for the rest of the year, the company's non-GAAP EPS would be negatively affected by approximately $0.05 to $0.10, including an approximate $0.03 to $0.05 impact in the first fiscal quarter.

The company reiterated its long-term expectation of mid-single digit revenue growth and double digit EPS growth, both on a constant currency basis. In addition, the company noted that the fiscal year 2018 outlook and guidance does not include the impact of the previously announced divestiture of a portion of its Patient Monitoring and Recovery division to Cardinal Health, which the company continues to expect to close in the second fiscal quarter. The company intends to update its guidance upon close of the transaction.

"We are creating distinct competitive advantages and capitalizing on the long-term trends in healthcare: namely, the desire to improve clinical outcomes; the growing demand for expanded access to care; and the optimization of cost and efficiency within healthcare systems. These trends, along with an aging population in most countries, produce secular growth tailwinds that we believe represent sustainable, long-term opportunities for Medtronic," said Ishrak. "As we look forward, we have a number of catalysts that make us optimistic about our ability to deliver on our commitments and expand patient access around the world to our products and services. Our leadership team and employees continue to focus on driving excellence and impact in all that we do, and we look forward to the fiscal year ahead."

For earnings history and earnings-related data on Medtronic (MDT) click here.

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