By Mike Evers, ORTHOWORLD
Medtronic posted FY 3Q19 orthopedic revenue of USD $739.8MM for the period ending January 25, 2019, a -0.3% decrease vs. FY 3Q18. The company completed its acquisition of Mazor Robotics in December 2018, followed by the launch of the Mazor X Stealth Edition robotics guidance platform in January 2019.
The spine segment showed a slight reduction, offset by incremental revenue from new products like the Infinity OCT and Solera Voyager 5.5/6.0 fixation systems. Medtronic’s reporting structure also figured heavily into the lack of reported growth. Enabling technologies and capital equipment used in spine are also used, and reported, in the company’s brain segment. Adjusting for this, the spine segment would have grown 4.6% per leadership. Medtronic CEO Omar Ishrak said, “We believe our strong capital equipment sales supporting our Brain Therapies growth are a leading indicator for future growth in our Spine business as customers choose to link future spine implant purchases with the capital equipment that they’re acquiring.”
ORTHOWORLD estimates FY 3Q19 and YTD segment sales and growth on an as-reported basis as follows.
| |
FY 3Q19 |
FY 3Q18 |
$ Change |
% Change |
| Spine |
$599.0 |
$605.0 |
-$6.0 |
-1.0% |
| Orthobiologics |
$140.8 |
$137.0 |
$3.8 |
2.8% |
| Total |
$739.8 |
$742.0 |
-$2.2 |
-0.3% |
| |
FY 9mo19 |
FY 9mo18 |
$ Change |
% Change |
| Spine |
$1,830.5 |
$1,817.0 |
$13.5 |
0.7% |
| Orthobiologics |
$392.3 |
$390.0 |
$2.3 |
0.6% |
| Total |
$2,222.8 |
$2,207.0 |
$15.8 |
0.7% |
ORTHOWORLD estimates Medtronic’s orthopaedic revenue by geographic region as follows.
| Geographic Region |
FY 3Q19 |
FY 3Q18 |
$ Change |
% Change |
| US |
$522.20 |
$521.95 |
$0.2 |
0.0% |
| Ex-US |
$217.58 |
$220.05 |
-$2.5 |
-1.1% |
| Total |
$739.8 |
$742.0 |
-$2.2 |
-0.3% |
Net earnings in the quarter for all Medtronic revenue (including non-ortho) are as follows.
| FY 3Q19 |
Amount ($MM) |
% of Sales |
| Sales |
$7,546.0 |
|
| Cost of Sales |
-$2,265.0 |
30.0% |
| R & D |
-$561.0 |
7.4% |
| Selling and Admin |
-$2,596.0 |
34.4% |
| Other |
-$855.0 |
11.3% |
| Net Earnings |
$1,269.0 |
16.8% |
Sources: Medtronic; ORTHOWORLD estimates
Mike Evers is ORTHOWORLD’s Market Analyst. He can be reached by email.
