Minnesota-run medical device maker Medtronic PLC got its groove back Tuesday, as strong quarterly sales of heart devices and surgical supplies combined with business efficiencies to reinforce projections for double-digit earnings growth.
Tuesday saw Medtronic's stock price complete a three-month U-turn following a disappointing earnings session last fall. The stock closed up 2.1 percent Tuesday, ending at $80.56 after not closing above $80 since Nov. 21. Several analysts downgraded Medtronic in January, and several weeks later a rumor circulated that Medtronic was working on a major asset sale.
Medtronic executives on Tuesday declined to comment on a Jan. 31 report from Bloomberg News that said Medtronic was working with advisers to try to sell many low-tech medical supply products it acquired from Covidien PLC just over two years ago.
The Bloomberg report said Medtronic could stand to get as much as $5 billion for its product lines in everything from needles to medical instruments.
"I'm not going to speculate on the future of specific products and businesses," Medtronic Chief Executive Omar Ishrak told investors Tuesday when asked about the sale rumors. Ishrak noted, however, that "good portfolio management" requires asking several questions — What value does a product add to Medtronic? What value does Medtronic bring to the product line? And is the business well-funded?
"We look at these questions across all our portfolio and we will take action both in terms of divestitures and acquisitions on that basis," Ishrak said.
Overall, Medtronic's revenue grew about 5 percent during the three months ended Jan. 27 compared to the same period last year.
Strong sales propelled Medtronic's adjusted income up 3.3 percent to $1.5 billion, on total sales of $7.28 billion during the quarter.