MINNEAPOLIS, MN—On November 22, 2022, Medtronic, the world's largest medical device company, reported its second-quarter financial results. While it worked through its most acute supply chain challenges (for example, a packaging issue in Surgical Innovations), Medtronic resolved the problems later than expected in the quarter, according to their CEO Geoff Martha.
Medtronic earned $427 million, or 32¢ per share, off $7.585 billion for the quarter that ended October 28, 2022. The bottom line was down 67%, and the top line was down 3% compared with Q2 2021. Adjusted to exclude one-time items, Medtronic saw EPS of $1.30. The results were 2¢ ahead of The Street, where analysts expected adjusted EPS of $1.28 and $7.7 billion in revenue.
Company officials spoke of significant expense reductions to boost earnings and focus on promising growth drivers. Future growth opportunities include surgical robotics, where Medtronic recently secured an FDA investigative device exemption for a clinical trial.
Despite the challenges during Q2, Martha insisted to analysts that the company has businesses where strategy and execution are yielding results. He said moving to a new operating model in recent years has yielded highly focused, accountable, empowered operating units.
A few areas where financial results increased are, Cranial and Spinal Technologies grew 5% in Q2, despite a negative impact from the Chinese market. Core U.S. sales were up 15% for spine. TAVR was up 15% — including 17% in the U.S. Medtronic in September announced the full U.S. launch of its Evolut FX TAVR system. Martha said the next-gen TAVR is driving 18% U.S. sequential revenue growth. "We expect Evolut FX to drive momentum for us over the coming quarters." Cardiac Rhythm Management enjoyed 4% growth, with Micra leadless pacemaker sales up 18%.