Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Medtronic, Inc. (MDT): Three Need-to-Know Takeaways From Earnings

It was show time for Medtronic, Inc. (NYSE:MDT) and medical device investors yesterday, as the world’s largest pure medical device maker reported its first-quarter results of the 2014 fiscal year.

Medtronic, Inc. (NYSE:MDT)

Overall, Medtronic, Inc. (NYSE:MDT) pulled off a mixed bag of a quarter, as the company’s top line slumped by 3% year-over-year to fall short of analyst expectations. To counteract that, Medtronic, Inc. (NYSE:MDT)’s net income jumped 10% over 2013’s first quarter, and an adjusted EPS score of $0.88 matched average projections for the company. That wasn’t enough to save Medtronic, Inc. (NYSE:MDT)’s stock from a sharp 2.4% decline on the day, however, a big stumble for shareholders who have gotten used to the stock’s 28.8% year-to-date gains.

Let’s take a deeper look beyond the broad numbers, however, to see just where Medtronic, Inc. (NYSE:MDT)’s leading — and lagging — in the device industry. Here are three key takeaways from this device giant’s quarter.

High-growth fields on the rise
Even with Medtronic, Inc. (NYSE:MDT)’s sales taking a hit, the company’s making solid progress on some innovative areas that investors need to watch.

Medtronic’s neuromodulation sales climbed 3% for the quarter, a modest but welcome increase for a business that’s been picking up across the industry. The segment isn’t Medtronic’s largest, or even close — it only pulled in $428 million for the quarter, around 60% of what the company generated in spine product sales. Still, neuromodulation products have been on the rise around other leading device makers. Stryker Corporation (NYSE:SYK)‘s one of the top names in devices, and its neurotech business pulled in nearly 7% growth in the company’s most recent quarter, and if Medtronic can match those kind of numbers in the future, neuromodulation will become a major part of this company’s Restorative Therapies division.

Shifting business segments, Medtronic’s CoreValve heart valve has garnered a lot of attention recently, particularly as the company battles rival Edwards Lifesciences Corp (NYSE:EW) and its Sapien valve in legal and sales fights. That didn’t keep this device down, however, as the CoreValve helped Medtronic’s small but high-growth Structural Heart segment pull in 12% operational growth for the quarter.

CoreValve has a long way to go to match Edwards Lifesciences Corp (NYSE:EW)’s Sapien — after all, the latter’s the only product in the industry to be approved in the U.S., leaving Medtronic’s device to fight for European and other international sales so far. However, the Sapien’s sales have slowed in recent quarters, and if Medtronic can take advantage of Edwards’ declining momentum, the CoreValve might become a real star for this company in future quarters.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.