(Reuters) - Medtronic Plc (MDT.N)’s fourth-quarter profit topped analysts’ estimates as the world’s largest standalone medical device maker saw increased demand across almost all of its businesses, including its minimally invasive therapies.
Medtronic, which gets most of its sales from heart devices, spinal implants and insulin pumps, has been making deals to push into the minimally invasive surgical products market in the past few years.
The minimally invasive therapies unit, which Medtronic acquired as part of its $42.9 billion Covidien deal, generated sales of $2.61 billion in the quarter ended April 28, a 6 percent rise from a year earlier.
Medical technology companies, such as Boston Scientific (BSX.N) and Baxter (BAX.N), have had a strong start to the year and investors have been encouraged by their solid growth prospects, as intense scrutiny over drug prices makes owning pharma and biotech stocks risky.
The industry represents a way to bet on increasing medical procedures as the population ages, while potentially avoiding political risks.
Leerink Partners analysts note that if Medtronic can continue to successfully execute on a steady stream of new product launches, the company should eventually be increasingly well-positioned to drive growth acceleration.
Sales in Medtronic’s cardiac and vascular unit, where the company sells defibrillators, pacemakers, heart valves and stents, rose 5 percent on a constant currency basis to $2.85 billion, accounting for 36 percent of total sales.
Net income attributable to Medtronic rose 5.3 percent to $1.16 billion, or 84 cents per share, in the quarter.
Excluding items, the company earned $1.33 per share, beating analysts’ average estimate by 2 cents, according to Thomson Reuters I/B/E/S.
While some were nervous whether Medtronic would meet expectations given the utilization strength in first quarter for peers, we thought these numbers came in above expectations, Evercore ISI analyst Vijay Kumar said in a client note.
Net sales rose 4.6 percent to $7.92 billion, ahead of analysts’ average estimate of $7.86 billion.
The Dublin-based company said on Thursday it expects fiscal 2018 adjusted earnings to grow 9 percent-10 percent and revenue growth of 4 percent-5 percent on a constant currency basis.
”We are optimistic that investors will digest the Fiscal 2018 guidance and see conservatism baked into the forecast after Fiscal 2017, where the guidance ranges proved to be aggressive, Cowen & Co analysts said in a client note.
Medtronic’s shares were little changed in morning trading on Thursday.
Reporting by Akankshita Mukhopadhyay and Divya Grover in Bengaluru; Editing by Martina D'Couto