* CEO: Q2 was disappointing, but mainly due to temporary
* Qtrly revenue $7.35 bln vs. est. $7.46 bln
* Co cuts adj. earnings forecast for fiscal 2017
* Shares fall more than 9 pct
(Adds conf call details; updates shares)
Nov 22 Medtronic Plc reported
weaker-than-expected quarterly revenue driven by slower growth
in its diabetes and heart product units, prompting the company
to cut its adjusted earnings forecast for fiscal 2017.
Shares of the world's No. 1 standalone medical device maker
fell about 9 percent to $73.14 on Tuesday, and Chief Executive
Omar Ishrak emphasized that the "disappointing" quarter was
largely affected by temporary factors.
Revenue at Medtronic's diabetes unit rose 3 percent to $462
million in the second quarter ended Oct. 28. (bit.ly/2gFRNT8)
However, the company said growth was hurt by the timing
between approval and shipments for its MiniMed 630G device, and
the early approval of its "artificial pancreas" device called
MiniMed 670G - the first device that allows a glucose sensor
to communicate with an insulin pump and automatically regulate
insulin flow - was approved by the U.S. Food and Drug
Administration in September and is expected to launch in spring
Sales in Medtronic's cardiac and vascular unit, which
includes defibrillators, pacemakers, heart valves and stents,
were $2.58 billion in the quarter, below analysts' average
estimate of $2.64 billion, compiled by Evercore ISI.
The company highlighted certain negative trends that are
expected to persist, including an impact to UK revenue due to
limits imposed by National Health Service on bulk purchases, and
weaker growth in the Middle East as governments deal with a
higher deficit thanks to falling oil prices.
However, Ishrak said on a conference call that new launches,
including 15 surgical products and MiniMed 670G "will give us
enough growth to take us well within the mid single-digit range"
in terms of fiscal 2017 revenue.
Medtronic cut its adjusted earnings forecast to a range of
$4.55-$4.60 per share from $4.60-$4.70 for the fiscal year
ending April 28, 2017.
It also lowered its revenue growth to be within the
mid-single-digit range on a constant currency basis, from the
upper half of the mid-single-digit range.
Improvement in the back half of the year is essential
particularly in the context of potential Obamacare turbulence,
Cowen & Co analysts said, adding that they remained optimistic
the company would rebound from the deceleration.
Medtronic's revenue rose 4 percent to $7.35 billion, missing
the average analysts' estimate of $7.46 billion, according to
Thomson Reuters I/B/E/S.
Excluding items, the company earned $1.12 per share, beating
the average analyst estimate by one cent, benefiting from higher
(Reporting by Akankshita Mukhopadhyay and Natalie Grover in
Bengaluru; Editing by Anil D'Silva and Martina D'Couto)