On November 21, 2023, Medtronic (NYSE: MDT) announced its financial results for the second quarter of fiscal year 2024 (FY24), ended October 27, 2023. The Second QuarterRevenue of approximately 8 billion USD (approximately 56.8 billion CNY), a year-over-year increase of 5.3%, with organic growth of 5.0%.。CompanyIncrease to 202Organic revenue growth and earnings per share guidance for FY4.Basic business growth is strong,Multiple regions and various businesses have all achieved growth, itsEn:
- Cardiovascular portfolio revenue reached $2.923 billion, representing a year-over-year increase of 5.9% and organic growth of 4.8%.
- Neuroscience portfolio revenue reached $2.288 billion, representing a year-over-year increase of 4.7% and organic growth of 4.2%.
- Medical Surgical Portfolio revenue was $2.142 billion, representing a 7.0% increase year-over-year, with organic growth of 5.6%;
- Diabetes revenue was $610 million, an increase of 9.7% year-over-year, with organic growth of 6.7%.
The Evolut™ FX Transcatheter Aortic Valve Implantation (TAVI) System, the integrated Simplera™ Continuous Glucose Monitoring (CGM) System, and the PulseSelect™ Pulsed Field Ablation (PFA) System have received CE certification.(Products correspond to the figure below from left to right in the order described.)Medtronic Q2Global revenue was US$7.984 billion, a year-on-year increase of 5.3%, with organic growth of 5.0%., GAAP (Generally Accepted Accounting Principles) net income for the second quarter was $909 million, an increase of 113% year-over-year, while non-GAAP net income was $1.667 billion, a decrease of 3% year-over-year.Cardiovascular Combination:Cardiovascular ProductsThe combination includes the Cardiac Rhythm and Heart Failure (CRHF), Structural Heart and Aorta (SHA), and Coronary and Peripheral Vascular (CPV) divisions.DepartmentRevenue of $2.923 billion, a year-over-year increase of 5.9%, with organic year-over-year growth of 4.8%Among them, SHA achieved high single-digit organic growth, while CRHF and CPV achieved mid single-digit organic growth.CRHF：Cardiac pacing therapy achieved high single-digit growth, with the Micra™ Transcatheter Pacing System achieving low double-digit growth. Meanwhile, the cardiovascular diagnostics business achieved high single-digit growth, and the cardiac ablation solutions business achieved mid-single-digit growth.SHA：Aortic and Heart Surgery business achieved high single-digit growth. Structural Heart business achieved mid-single-digit growth, driven by the continued rollout of Evolut™ FX in the United States and Japan.CPV：Coronary artery business achieved mid-single-digit growth, with continued growth of the Onyx Frontier™ drug-eluting stent. Peripheral vascular health business achieved low single-digit growth, with drug-coated balloons achieving growth in the mid-teens percentage points.Regulatory Approval:Aurora EV-ICD™ System (Extravascular Implantable Cardioverter Defibrillator) and Symplicity Spyral™ Renal Denervation (RDN) System receive FDA approval; Evolut™ FX Transcatheter Aortic Valve Implantation (TAVI) System and PulseSelect™ Pulsed Field Ablation (PFA) System obtain CE Mark certification.Experimental Progress:The four-year results of the Evolut™ Low Risk Trial were announced at the 2023 Transcatheter Cardiovascular Therapeutics (TCT) conference, showing that the Evolut™ TVAR system achieved excellent outcomes in the trial: durable valve performance, better hemodynamic performance, and a low rate of thrombosis. Additionally, over the four years, the all-cause mortality and disabling stroke rates with the use of this system were lower compared to surgical aortic valve replacement (SAVR).Neuroscience PortfolioIncluding Cranial & Spinal Technologies (CST), Specialty Therapies (ST), and Neuromodulation (NM)）Three departments.This department this quarterRevenue of $2.288 billion, a year-on-year increase of 4.7%, with organic growth of 4.2%Among them, CST achieved organic high single-digit growth, while ST and NM had organic low single-digit growth.CST：Core spine business achieved high single-digit growth, driven by the continued promotion of the AiBLE™ ecosystem, which boosted the adoption of implants. Neurosurgery business saw mid-single-digit growth due to strong sales of the StealthStation™ navigation system and O-arm™ imaging system.ST：Neurovascular business achieved mid-single-digit growth, with strong growth in blood flow diversion. ENT and Pelvic Health businesses (mid-single-digit growth excluding product line divestitures) achieved low-single-digit growth.NM：Targeted drug delivery achieves mid-single-digit growth, and Pain Stim achieves low-single-digit growth.Medical Surgical Combination:Medical Surgical SuiteIncluding two divisions: Surgical and Endoscopic (SE) and Patient Monitoring and Respiratory Interventions (PMRI).The Second Quarter of the DepartmentRevenue was $2.142 billion, a year-over-year increase of 7.0%, with organic revenue growing by 5.6% year-over-year.Among them, SE achieved high single-digit organic growth, and PMRI achieved low single-digit organic growth.SE：General surgical technology achieved low double-digit growth, advanced surgical technology achieved mid-single-digit growth, and the endoscopy business achieved low double-digit growth. Additionally, the installed base of the Hugo™ robotic-assisted surgery (RAS) system grew, and it received FDA Investigational Device Exemption (IDE) approval to begin clinical trials in the U.S. for hernia surgery.PMRI：Patient monitoring achieved low single-digit growth, with sales of the Nellcor™ pulse oximetry monitors achieving double-digit growth. Due to the high single-digit growth in airway offsetting the decline in ventilator sales, there was no significant change in the performance of the respiratory interventions business.Diabetes BusinessRevenue was $610 million, a year-over-year increase of 9.7%, with organic growth of 6.7%.。Among them, in the developed markets outside the United States, the diabetes business achieved growth in the mid-teens percentage range due to the continued rollout of the MiniMed™ 780G system and the increased adoption of continuous glucose monitoring (CGM) supported by the Guardian™ 4 sensor.After the first full quarter of the MiniMed™ 780G system's U.S. launch, diabetes pump revenue in the U.S. grew by a low thirty percentage points quarter-over-quarter. Overall, compared to the same period last year, Medtronic's diabetes business in the U.S. declined by a mid-single digit percentage due to customer attrition, although the base number of customers in the diabetes business increased quarter-over-quarter.All-in-One, Disposable Simplera™ Continuous Glucose MonitorObtained CE certification and will be launched in phases.In the second quarter, Medtronic's revenue in the U.S. was $4.175 billion, a year-over-year increase of 2.6%, with organic growth of 3.0%; revenue in developed countries outside the U.S. reached $2.368 billion, growing 9.8% year-over-year, with organic growth of 6.4%; revenue in emerging markets amounted to $1.441 billion, increasing 6.0% year-over-year, with organic growth of 8.8%, of which...Achieved High Single-Digit Growth in ChinaOperating cash flow for the fiscal year to date is $1.5 billion, and free cash flow is $700 million.Medtronic Chairman and CEO Geoff Martha said, "Medtronic continues to deliver steady mid-single-digit revenue growth with strong fundamentals, performing well across businesses and geographies. We're launching some revolutionary products into the market, obtaining regulatory approvals for several products recently and launching a few important ones. So we feel good about our ability to continue to grow steadily."
On the day of releasing the Q2 earnings report, the company raised its revenue growth and earnings per share guidance for the fiscal year 2024.Medtronic Updates Organic Revenue Growth Guidance for FY2024From the previous 4.5% increased to 4.75%If the foreign exchange rate as of early November remains unchanged, the revenue growth for the fiscal year 2024 will be approximately 2.6%.
Medtronic Executive Vice President and Chief Financial Officer Karen Parkhill stated, "Our revenue, marginal profits, and net profits have all exceeded expectations. Overall, the company has performed well this quarter. ... Considering that we have already made changes to our operating model, incentive mechanisms, capital allocation, and other drivers, we are now positioning the company to achieve sustained mid-single-digit growth in revenue. In the future, converting this enduring revenue growth into lasting profitability will remain a top priority for our company."Medtronic is a global leading medical technology company, established in 1949, with its headquarters in Minneapolis, Minnesota, USA. The company mainly focuses on providing lifelong treatment, diagnosis, and monitoring solutions for patients with chronic diseases such as cardiovascular diseases, neurology, diabetes, and spinal disorders. As of the second quarter of the fiscal year 2024, the company's total assets amounted to 90.087 billion US dollars.Editor-in-Chief | Zhao Qing Reviewed by | Yi He
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