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Medtronic reported FY3Q20 orthopedic revenue of USD $775.6 million, +1.9% vs. FY3Q19. Company leadership characterized the light growth in the quarter as a surprise, largely due to customer buying patterns of Infuse bone morphogenetic protein biologic product. Customers using Infuse are drawing down inventories of the product in anticipation of new products in Medtronic’s pipeline. Additionally, the company’s selling cycle is heavily weighted to the last month of a given quarter. The over-reliance on large, quarter-end orders makes Medtronic susceptible to late-emerging headwinds as was the case in FY3Q20.
On the positive side, the company’s Surgical Synergy strategy continues to drive implant sales using enabling technology. Medtronic Chairman and CEO Omar Ishrak said that sales of the Mazor robot “meaningfully outpaced” the competition. Leadership remains confident that FY4Q20 will bring a significant acceleration in growth. Medtronic’s Biennial Institutional Investor and Analyst Day is scheduled for June 2, 2020.
“Too often our largest orders come in at the end of the month. This dynamic makes the business challenging to manage; it stresses our operations and it really makes it difficult to mitigate headwinds that pop up within the quarter. To fix this, we will change our current operating mechanisms, certain internal metrics, and some incentives as well.” – Medtronic EVP and President of Restorative Therapies Group, Geoffrey Martha
Revenue Data
All revenue data is provided in USD millions unless otherwise noted. Sales and growth rates are estimated on an as-reported basis.
Segment Sales
| FY 3Q20 | FY 3Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Spine | $653.6 | $630.4 | $23.2 | 3.7% |
| Orthobiologics | $122.0 | $131.0 | ($9.0) | (6.9%) |
| Total | $775.6 | $761.4 | $14.2 | 1.9% |
| FY 9mo20 | FY 9mo19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Spine | $1,956.7 | $1,911.5 | $45.2 | 2.4% |
| Orthobiologics | $389.0 | $383.0 | $6.0 | 1.6% |
| Total | $2,345.7 | $2,294.5 | $51.2 | 2.2% |
Geographic Sales
| FY 3Q20 | FY 3Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $550.1 | $533.6 | $16.5 | 3.1% |
| Ex-US | $225.5 | $227.8 | ($2.3) | (1%) |
| Total | $775.6 | $761.4 | $14.2 | 1.9% |
Earnings
| Amt | % of Sales | |
|---|---|---|
| Sales | $7,717.0 | |
| Cost of Goods | ($2,400.0) | 31.1% |
| R & D | ($573.0) | 7.4% |
| Selling and Admin | ($2,587.0) | 33.5% |
| Other | ($238.0) | 3.1% |
| Net Earnings | $1,919.0 | 24.9% |
Mike Evers is ORTHOWORLD’s Digital Content Strategist. He can be reached by email.
Medtronic reported FY3Q20 orthopedic revenue of USD $775.6 million, +1.9% vs. FY3Q19. Company leadership characterized the light growth in the quarter as a surprise, largely due to customer buying patterns of Infuse bone morphogenetic protein biologic product. Customers using Infuse are drawing down inventories of the product in...
Medtronic reported FY3Q20 orthopedic revenue of USD $775.6 million, +1.9% vs. FY3Q19. Company leadership characterized the light growth in the quarter as a surprise, largely due to customer buying patterns of Infuse bone morphogenetic protein biologic product. Customers using Infuse are drawing down inventories of the product in anticipation of new products in Medtronic’s pipeline. Additionally, the company’s selling cycle is heavily weighted to the last month of a given quarter. The over-reliance on large, quarter-end orders makes Medtronic susceptible to late-emerging headwinds as was the case in FY3Q20.
On the positive side, the company’s Surgical Synergy strategy continues to drive implant sales using enabling technology. Medtronic Chairman and CEO Omar Ishrak said that sales of the Mazor robot “meaningfully outpaced” the competition. Leadership remains confident that FY4Q20 will bring a significant acceleration in growth. Medtronic’s Biennial Institutional Investor and Analyst Day is scheduled for June 2, 2020.
“Too often our largest orders come in at the end of the month. This dynamic makes the business challenging to manage; it stresses our operations and it really makes it difficult to mitigate headwinds that pop up within the quarter. To fix this, we will change our current operating mechanisms, certain internal metrics, and some incentives as well.” – Medtronic EVP and President of Restorative Therapies Group, Geoffrey Martha
Revenue Data
All revenue data is provided in USD millions unless otherwise noted. Sales and growth rates are estimated on an as-reported basis.
Segment Sales
| FY 3Q20 | FY 3Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Spine | $653.6 | $630.4 | $23.2 | 3.7% |
| Orthobiologics | $122.0 | $131.0 | ($9.0) | (6.9%) |
| Total | $775.6 | $761.4 | $14.2 | 1.9% |
| FY 9mo20 | FY 9mo19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Spine | $1,956.7 | $1,911.5 | $45.2 | 2.4% |
| Orthobiologics | $389.0 | $383.0 | $6.0 | 1.6% |
| Total | $2,345.7 | $2,294.5 | $51.2 | 2.2% |
Geographic Sales
| FY 3Q20 | FY 3Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $550.1 | $533.6 | $16.5 | 3.1% |
| Ex-US | $225.5 | $227.8 | ($2.3) | (1%) |
| Total | $775.6 | $761.4 | $14.2 | 1.9% |
Earnings
| Amt | % of Sales | |
|---|---|---|
| Sales | $7,717.0 | |
| Cost of Goods | ($2,400.0) | 31.1% |
| R & D | ($573.0) | 7.4% |
| Selling and Admin | ($2,587.0) | 33.5% |
| Other | ($238.0) | 3.1% |
| Net Earnings | $1,919.0 | 24.9% |
Mike Evers is ORTHOWORLD’s Digital Content Strategist. He can be reached by email.
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ME
Mike Evers is a Senior Market Analyst and writer with over 15 years of experience in the medical industry, spanning cardiac rhythm management, ER coding and billing, and orthopedics. He joined ORTHOWORLD in 2018, where he provides market analysis and editorial coverage.
