Medtronic's profits were down more than 14% in its first fiscal quarter, but Chief Executive Geoff Martha said patient volumes are up and the company raised its earnings estimates for the rest of the year.

During May, June and July, the company — based in Ireland but run from Fridley — saw sales increase 4.5% to $7.7 billion. In the same quarter a year ago, they dropped nearly 8%.

Net profits were $797 million, or 59 cents a share.

On a conference call with analysts, Martha said the company is now benefiting from "much improved underlying fundamentals." Those cross categories, from consolidating supply chains and making manufacturing more efficient to an undisclosed number of job cuts.

"Stabilizing and then ultimately improving gross margins remains a priority for us," said Chief Financial Officer Karen Parkhill on the call. While currency exchange issues will be an ongoing challenge, "you are beginning to see the results from the actions we are taking to drive structural changes in our global operations and supply chains."

J.P. Morgan analyst Robbie Marcus called the results better than expected, across the board.

John Boylan, senior equity analyst with Edward Jones, echoed that in his research note on the results.

"Investors should not overlook the positive changes internally at Medtronic that are starting to shine through, giving us confidence in our long-term view. These include streamlining its operations, investing more in research and development, supply-chain improvements, and others," wrote Boylan.

Revenue and earnings per share of $1.20, when adjusted for one-time expenses such as the impact of foreign currency translation, beat analyst expectations. The stock was up 2.6% for the day, besting the stock markets as a whole.

Parkhill stressed the company is "focused on driving margin expansion and ultimately on the gross [profit] margin getting back to pre-COVID levels over time."

The strongest revenue growth came from the structural heart and aortic division, which saw an overall global sales increase of 9.9%. The unit fared better in the U.S. where sales were up 14.4%.

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The closely watched diabetes business saw worldwide sales gains of 6.8%. Diabetes sales in the U.S. were down 8.7%, but Martha said the company is seeing strong demand for the MiniMed 780G insulin pump, which was approved by the U.S. Food and Drug Administration in April.

"The turnaround in diabetes is real and underway," Martha said.

Martha said med-tech connected to artificial intelligence can be a growth area for the company, pointing to the appointment of Ken Washington as chief technology and innovation officer. Washington, a former Amazon executive, will lead the effort to leverage robotics and AI across Medtronic's portfolio.

"We've got a number of businesses that have first-of-their-kind AI-powered solutions. Surgeons who use AI will be replacing those who don't," Martha said.

He also pointed to several products in the pipeline, including the Symplicity Spyral, a catheter renal denervation device that treats hypertension with radio waves. It will be reviewed by an FDA advisory committee panel on Wednesday.

Marcus, the J.P. Morgan analyst, reviewed the briefing documents posted by the agency on Monday morning and believes that it bodes well for future approval of the device.

"We view the conclusion and briefings as generally supportive of FDA approval," wrote Marcus in a research note, adding that it had a "strong safety profile."

The FDA also is evaluating a renal denervation device from another manufacturer. Right now, hypertension is treated with pharmaceuticals; there is currently no approved renal denervation device in the U.S.

Analysts are interested by the scale of sales that the untapped renal denervation market could represent. At an investor event last year, the company said it could be a "multi-billion-dollar opportunity" by the end of the decade.

The company raised its guidance for adjusted earnings for the fiscal year from a range of $5 to $5.10 a share to a range of $5.08 to $5.16. Sales are estimated to rise 4.5%, up from a guidance of 4 to 4.5%.