Medical devicemaker Medtronic
reported a drop in profits even as the company enjoyed what CEO Omar Ishrak described as its “highest revenue growth performance in five years.” The Minneapolis-based company disclosed no new information about its pending deal to acquire Irish medical supplies company Covidien.
U.S. sales rose 6% to $2.33 billion, while worldwide revenue was up 4%
on a constant currency basis to $4.27 billion in the first quarter of the company's fiscal 2015, which ended July 25, compared with $4.08 billion in the same quarter a year ago. International sales, which generated about 45% of the company's total revenue, edged up 2% to $1.94 billion for the quarter.
Net earnings, however, were dampened by higher selling, general and administrative costs and restructuring charges during the first quarter. Net earnings fell 9% to $871 million.
The company reported $41 million in after-tax acquisition-related costs related to the Covidien acquisition. The Minneapolis-based company said it still expects to close the $42.9 billion deal by early 2015.
Last month, Ishrak told Modern Healthcare
that the combination would allow Medtronic to assemble a broader product portfolio, which buyers are increasingly demanding. Ishrak also says the deal would put Medtronic in a better position to invest in medical technologies in the U.S. As part of the deal, however, Medtronic plans to move its headquarters to Dublin, where Covidien is based, joining a wave of tax inversions that has drawn scrutiny in Washington.
In the U.S. market, sales of cardiac rhythm management and heart failure devices rose 8% to $654 million in the first quarter. Revenue for coronary and structural heart products increased 15% to $281 million. Sales of spine devices, however, fell 6% to $506 million.
Medtronic expects between 3% and 5% in full-year revenue growth in fiscal 2015.Follow Jaimy Lee on Twitter: @MHjlee