Recently,
Medtronic
(
MDT
) debriefed analysts about its ongoing performance in various
divisions and markets during the Barclays Global Healthcare
Conference. Below are the excerpts from the confab.
The European market dragged the performance of the company in the
past few quarters. The company witnessed softness in the European
market in the last quarter as well. However, the performance in
the region is gradually improving. Additionally, Medtronic is
planning to gain reimbursement for its offerings in many European
nations. This should boost performance in the region.
With the Implantable Cardioverter Defibrillator (ICD) and Spine
divisions in the U.S. representing one-third of the company's
business, the sluggish U.S. market for ICDs and Spine (which
declined high single-digits to double-digits in last few
quarters) hampered the performance of Medtronic and hurt growth
in the last two years. Growth in other franchises also could not
offset this adverse impact. However, management witnessed signs
of stability in the domestic ICD and Spine market. Further,
Medtronic is also gaining market share in ICD and Spine. However,
pricing pressure prevails for the company.
According to management, the CRM (Cardiac Rhythm Management)
market will grow in single-digits. While the company is capturing
market share in Cardiac Rhythm Disease Management (CRDM) division
on the back of newer products, it is gaining share in
cardiovascular space with the recent launch of its Resolute
Integrity in the U.S. as well as Japan.
The company continues to record 20% growth in the emerging
markets, accounting for half of its overall growth. The adoption
of its ICDs and pacers in the emerging market continues to
improve. Moreover, commercialization of new products should
accelerate growth in the emerging markets.
After acquiring China Kanghui Holdings, which will likely add
strength to its orthopedic franchise in that country, Medtronic
is keeping an eye on accretive buyouts in the region. This should
expand Medtronic's foothold in the emerging markets as it plans
to achieve 20% of its revenues from emerging markets by fiscal
2015−16.
Medtronic expects revenue growth towards the higher end of the
expected growth rate of 3%-4% for top line. The company also
expects to record earnings per share towards the high end of the
outlook band of $3.66 and $3.70 for fiscal 2013. Medtronic is
slated to release fourth-quarter results on May 21, 2013.
The stock carries a Zacks Rank #3 (Hold). While we remain on the
sidelines for this medical device major, other medical stocks
that warrant a look are
Abaxis
(
ABAX
),
Conceptus
(
CPTS
) and
Edwards Lifesciences
(
EW
). These stocks carry a Zacks Rank #2 (Buy).
ABAXIS INC (ABAX): Free Stock Analysis Report
CONCEPTUS INC (CPTS): Free Stock Analysis
Report
EDWARDS LIFESCI (EW): Free Stock Analysis
Report
MEDTRONIC (MDT): Free Stock Analysis Report
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