Medtronic Cuts Guidance on Sluggish Revenue
23 November 2016 - 12:40AM
Dow Jones News
Medtronic PLC on Tuesday said revenue growth lagged behind
expectations in the latest quarter while customers waited for new
product releases, and the company signaled some of that
sluggishness could linger.
Shares fell 5.7% to $76 in premarket trading as the company also
cut its guidance for the quarter.
"Revenue was disappointing and did not meet our expectations,"
Chief Executive Omar Ishrak said. Slower-than-expected revenue
growth was hurt by upcoming new product introductions in its
cardiovascular and diabetes units, which reduces the demand for
current products as consumers wait for new ones.
In September, the Food and Drug Administration approved for sale
a long-awaited insulin pump made by Medtronic in a significant
advance toward a so-called artificial pancreas for Type 1 diabetes
patients, as it takes some of the guesswork out of blood-sugar
control.
The company said new products should drive revenue growth back
to normal ranges but also warned that "some of the challenges" that
hurt revenue in the quarter could continue in the near term.
Medtronic said it now expects revenue growth in the mid-single
digit range compared with the upper half of the mid-single digit
previously forecast. It also now expects fiscal year 2017 adjusted
earnings per share of between $4.55 to $4.60, down from between
$4.60 to $4.70 previously.
Medtronic reported a fiscal first-quarter profit of $1.12
billion, or 80 cents a share, compared with $520 million, or 36
cents a share, a year ago. Excluding items, the company earned
$1.12 a share. Analysts polled by Thomson Reuters expected earnings
of $1.11 a share.
Revenue grew 4.1% to $7.35 billion.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
November 22, 2016 08:25 ET (13:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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