Summary
Medtronic plc's 10-Q filing for the period ending January 25, 2018, reported a net loss of $1.39 billion, or ($1.03) per diluted share, for the third quarter. This compares unfavorably to a net income of $821 million, or $0.59 per diluted share, in the prior year's comparable quarter. The significant net loss was primarily driven by a substantial provisional tax charge of $2.2 billion related to the recently enacted U.S. Tax Cuts and Jobs Act of 2017. Excluding these and other "non-GAAP adjustments" like investment and IPR&D impairments, the company reported a non-GAAP net income of $1.59 billion, or $1.17 per diluted share, indicating underlying operational profitability. Despite the GAAP net loss, the company demonstrated revenue growth, with net sales increasing 1% year-over-year to $7.37 billion for the quarter. This growth was supported by strong performance in the Cardiac and Vascular Group and the Diabetes Group, while the Minimally Invasive Therapies Group saw a decline due to the recent divestiture of certain businesses. The company also continued to manage its debt effectively, reducing total debt by over $4.5 billion year-over-year, and maintained a strong liquidity position. Investors should note the significant impact of U.S. tax reform on the reported results, with underlying operational performance remaining robust.
Financial Highlights
54 data points| Revenue | $7.37B |
| Cost of Revenue | $2.19B |
| Gross Profit | $5.17B |
| SG&A Expenses | $2.52B |
| Operating Income | $1.44B |
| Interest Expense | $270.00M |
| Net Income | -$1.39B |
| EPS (Basic) | $-1.03 |
| EPS (Diluted) | $-1.03 |
| Shares Outstanding (Basic) | 1.35B |
| Shares Outstanding (Diluted) | 1.35B |
Key Highlights
- 1Reported a GAAP net loss of $1.39 billion for the third quarter, impacted by a $2.2 billion provisional tax charge from the U.S. Tax Cuts and Jobs Act.
- 2Excluding tax reform and other "non-GAAP adjustments", the company reported a non-GAAP net income of $1.59 billion, or $1.17 per diluted share, indicating underlying operational strength.
- 3Net sales increased 1% year-over-year to $7.37 billion, driven by growth in the Cardiac and Vascular Group and Diabetes Group.
- 4The Minimally Invasive Therapies Group saw a 16% net sales decline due to the divestiture of the Patient Care, Deep Vein Thrombosis, and Nutritional Insufficiency businesses.
- 5The company significantly reduced its debt, with total debt decreasing to $28.8 billion from $33.4 billion in the prior year.
- 6Maintains a strong liquidity position with $6.36 billion in cash and cash equivalents and $14.4 billion in cash, cash equivalents, and current investments.
- 7Announced a new "Enterprise Excellence Program" expected to generate over $3 billion in annual gross savings by fiscal year 2022, with anticipated restructuring charges of $1.6 billion to $1.8 billion.