Medtronic, a Minneapolis-based medical-device manufacturer, said profits fell again in the second quarter of its fiscal 2015, reporting an 8.2% drop in net earnings to $828 million. One-time events, such as charges for a pending major acquisition, accounted for the decline, the company contended.
In August, Medtronic had reported that net earnings decreased 9% to $871 million in the first quarter of its fiscal year.
Excluding a $100 million pre-tax donation to the Medtronic Foundation and charges relating to the company's pending acquisition of Covidien, an Irish provider of surgical supplies, there was a 4% increase in net earnings in the second quarter of fiscal 2015, the company said.
And sales were up in the first two quarters of this year, increasing 4.1% on a reported basis to $4.3 billion in the second quarter of 2015, compared to $4.2 billion in the same quarter a year ago.
Medtronic reported similar results in the U.S. market, which generated 56% of the company's worldwide revenue in the second quarter. Sales rose 5% to $2.4 billion in the second quarter, with the cardiac rhythm and heart failure segment— its largest U.S. business—reporting 3% revenue growth on a reported basis to $700 million in the second quarter.
Sales of coronary and structure heart technologies rose 15% to $285 million in the same period, fueled by stable market share for its drug-eluting stent business in the U.S.
The company said it expects between 4% and 5% in revenue growth on a constant currency basis for fiscal 2015. Like other devicemakers, Medtronic is facing pressure on pricing and utilization in the U.S. market as healthcare providers seek to lower supply costs and keep more patients out of the hospital.
Its planned $42.9 billion acquisition of Covidien is expected to close early next year, Medtronic said. Chairman and CEO Omar Ishrak on Tuesday told investors that the deal will “further strengthen and balance our growth profile.”
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