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Product / Company Performance

Medtronic Reports FY 3Q19 Orthopedic Revenue of $739.8MM, -0.3% vs. 3Q18 -

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.

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