(Reuters) - Medical device maker Medtronic Plc (MDT.N) on Tuesday beat analysts’ profit estimates for the second quarter and boosted its annual revenue growth outlook, driven by robust sales at its cardiac and surgical product units, sending its shares up 3 percent.
The rosy outlook is also being fueled by the company’s fast-growing diabetes segment, which makes insulin pumps and glucose monitoring systems. Sales at the unit rose 26 percent helped by the strong adoption of MiniMed 670G system in the United States.
Medtronic’s MiniMed 670G “artificial pancreas” is the first device to automatically deliver the right dose of insulin to patients with type 1 diabetes.
Sales across Medtronic’s business units beat analyst estimates, according to IBES data from Refinitiv. The company also raised its full-year organic revenue growth forecast to a range of 5.0 percent to 5.5 percent from 4.5 percent to 5.0 percent.
However, it maintained its full-year adjusted earnings forecast as it bears the brunt of a strong dollar and the potential impact of tariffs and its acquisition of Mazor Robotics MZOR.TA.
The company has pulled off a string of tuck-in acquisitions, including its recent deal to buy Mazor for about $1.64 billion, which will help bolster its spinal robotics business.
“(The deal) creates a long-term competitive advantage for us in the spine market - one that we intend to capitalize on,” said Chief Executive Omar Ishrak on a conference call with analysts.
Edward Jones analyst John Boylan said that while the spine division would “probably remain slower growing” than other segments, the deal should help grow the company’s spinal sales better than the market in the longer term.
For the third quarter, Medtronic expects to earn an adjusted profit between $1.23 and $1.25 per share, and a negative impact of about $120 million to $170 million on revenue, if foreign exchange rates hold. Analysts, on average, were expecting $1.26 per share.
Net income attributable to the company fell to $1.12 billion, or 82 cents per share, in the second quarter ended Oct. 26, due to a $235 million income tax provision.
Excluding items, Medtronic earned $1.22 per share, while net sales rose 6 percent to $7.48 billion.
Analysts were expecting a profit of $1.15 per share on revenue of $7.35 billion.
Shares of the Dublin-based company rose 3 percent to $93.25 in early trading.
Reporting by Saumya Sibi Joseph and Aakash Jagadeesh Babu in Bengaluru; Editing by Shailesh Kuber