DUBLIN, Nov. 23, 2021 /PRNewswire/ -- Medtronic plc (NYSE:MDT) today announced financial results for its second quarter of fiscal year 2022, which ended October 29, 2021.

Key Highlights

• Revenue of $7.8 billion increased 3% reported and 2% organic
• GAAP diluted EPS of $0.97; non-GAAP diluted EPS of $1.32
• Reiterates full year EPS guidance

The company reported second quarter worldwide revenue of $7.847 billion, an increase of 3% as reported and 2% on an organic basis, which excludes the $32 million benefit of foreign currency translation. Unless otherwise stated, all revenue growth rates in this press release are stated on an organic basis, which excludes the impact of foreign currency translation. The company's second quarter revenue results reflect the unfavorable market impact of COVID-19 and health system labor shortages on medical device procedure volumes, primarily in the U.S.

As reported, second quarter GAAP net income and diluted earnings per share (EPS) were $1.311 billion and $0.97, respectively, increases of 168% and 169%, respectively. As detailed in the financial schedules included at the end of this release, second quarter non-GAAP net income and non-GAAP diluted EPS were $1.792 billion and $1.32, respectively, increases of 30% and 29%, respectively.

Second quarter U.S. revenue of $3.997 billion represented 51% of company revenue and decreased 1%. Non-U.S. developed market revenue of $2.478 billion represented 32% of company revenue and increased 1% as reported and 2% organic. Emerging Markets revenue of $1.372 billion represented 17% of company revenue and increased 20% as reported and 16% organic.

"Our second quarter results reflect focused execution of our strategy and the strong underlying health of the business, despite the market impact of the pandemic resurgence and healthcare system staffing challenges on medical procedure volumes, particularly in the U.S., which affected our quarterly revenue growth," said Geoff Martha, Medtronic chairman and chief executive officer. "During the quarter, we continued to advance our pipeline, launched new products, and grew share in the majority of our businesses. Looking ahead, as our markets recover, Medtronic is one of the best positioned companies in healthcare. We have an expansive pipeline of leading technology, a robust balance sheet, and an expanding roster of proven top talent. Coupled with our revitalized operating model and new competitive mindset, we're poised to accelerate and sustain growth."

Cardiovascular Portfolio
The Cardiovascular Portfolio includes the Cardiac Rhythm & Heart Failure (CRHF), Structural Heart & Aortic (SHA), and Coronary & Peripheral Vascular (CPV) divisions. Cardiovascular revenue of $2.827 billion increased 4% as reported and 3% organic, driven by mid-single digit organic growth in CPV and low-single digit organic growth in CRHF and SHA.

• Cardiac Rhythm & Heart Failure revenue of $1.471 billion increased 3% as reported and organic. Adjusting for the discontinuation of HVAD™ System sales, CRHF revenue increased 6% organic. Cardiac Rhythm Management revenue increased in the high-single digits, driven by mid-single digit growth in Defibrillation Solutions and high-single digit growth in Cardiac Pacing Therapies, including mid-teens growth in Leadless Pacemakers on the continued global adoption of Micra™ transcatheter pacing systems. Cardiovascular Diagnostics revenue declined in the mid-single digits, as procedure volumes were affected by COVID-19 resurgence. Cardiac Ablation Solutions revenue increased in the mid-single digits on the continued adoption of Arctic Front Advance™ cryoballoon catheters and consoles.
• Structural Heart & Aortic revenue of $750 million increased 2% as reported and organic. Structural Heart grew in the high-single digits, with high-single digit growth in transcatheter aortic valves (TAVR). Cardiac Surgery increased in the high-single digits. Aortic declined in the mid-teens as a result of the previously announced global recall of the Valiant Navion™ thoracic stent graft system.
• Coronary & Peripheral Vascular revenue of $606 million increased 7% as reported and 6% organic. Coronary & Renal Denervation (CRDN) increased in the mid-single digits, driven by strength in emerging markets. Peripheral Vascular Health increased in the high-single digits, with mid-twenties endoVenous growth on strong sales of the VenaSeal™ closure system and the Abre™ venous stent.

Medical Surgical Portfolio
The Medical Surgical Portfolio includes the Surgical Innovations (SI) and the Respiratory, Gastrointestinal & Renal (RGR) divisions. Medical Surgical revenue of $2.299 billion increased 1% as reported and was flat organic, with high-single digit organic growth in SI partially offset by low double-digit organic declines in RGR. Excluding the impact of ventilator sales declines, Medical Surgical revenue increased 6% organic.

• Surgical Innovations revenue of $1.497 billion increased 7% as reported and organic. The division had mid-single digit growth in Advanced Surgical Instruments, driven by the continued adoption of the company's LigaSure™, Sonicision™, and Tri-Staple™ technologies. Hernia & Wound Management increased in the high-single digits, with strength in sutures.
• Respiratory, Gastrointestinal & Renal revenue of $802 million decreased 10% as reported and 11% organic. Excluding the impact of ventilator sales declines, RGR revenue increased 4% organic. Respiratory Interventions decreased in the mid-thirties, with sales of ventilators declining in the mid-fifties as demand returns to pre-pandemic levels. Patient Monitoring increased in the low-double digits, with mid-teens growth in the company's Nellcor™ pulse oximetry products driven in part by increased monitoring of COVID hospitalized patients. Gastrointestinal revenue increased in the mid-single digits, with low double-digit growth in Chronic & Colorectal on strength of PillCam™ system sales. Renal Care Solutions increased in the mid-single digits with low-forties growth in acute therapies driven by increased demand for adult and pediatric continuous renal replacement therapy.

Neuroscience Portfolio
The Neuroscience Portfolio includes the Cranial & Spinal Technologies (CST), Specialty Therapies, and Neuromodulation divisions. Neuroscience revenue of $2.136 billion increased 4% as reported and 3% organic, with high-single digit growth in Specialty Therapies and mid-single digit growth in Neuromodulation, partially offset by low-single digit declines in CST, all on an organic basis.

• Cranial & Spinal Technologies revenue of $1.067 billion was flat as reported and decreased 1% organic. Spine & Biologics decreased in the mid-single digits, driven by decreased spine market procedures as a result of the COVID-19 resurgence. Neurosurgery increased in the high-single digits, with strength in sales of StealthStation™ navigation systems, O-arm™ imaging systems, and Midas Rex™ powered surgical instruments.
• Specialty Therapies revenue of $634 million increased 9% as reported and 8% organic. Neurovascular increased in the low double-digits, with high-teens growth in Hemorrhagic Stroke products. Pelvic Health increased in the low-single digits, as market growth was affected by the COVID-19 resurgence. ENT grew in the low double-digits, driven by strong sales of NIM Vital™ nerve monitoring systems.
• Neuromodulation revenue of $435 million increased 6% as reported and organic. Brain Modulation increased in the mid-twenties, driven by the launch of the Percept™ PC deep brain stimulation (DBS) system and SenSight™ directional DBS lead system. Pain Therapies decreased in the mid-single digits, as high-single digit declines in Targeted Drug Delivery and flat results in Pain Stim offset high-single digit growth in Interventional.

Diabetes
Diabetes revenue of $585 million increased 2% as reported and 1% organic. Durable insulin pumps grew in the low-twenties, including high-teens growth in the U.S. and low-twenties growth in international markets on the continued launches of the MiniMed™ 770G and MiniMed™ 780G systems, respectively. Strong pump sales were offset by lower sales of consumables, which declined in the high-single digits. Sales of continuous glucose monitoring (CGM) products increased in the low-single digits.

Guidance
The company today updated its revenue growth guidance and reiterated its EPS guidance range for fiscal year 2022.

Given the greater-than-expected market impact of the pandemic and healthcare system staffing challenges in the fiscal second quarter, which is expected to continue into the second half of the fiscal year, the company now expects fiscal year 2022 revenue growth of 7-8% on an organic basis versus the prior expectation of approximately 9%. If recent foreign currency exchange rates hold, revenue growth in fiscal year 2022 would be positively affected by approximately $0 to $50 million versus the $100 to $200 million positive impact previously.

The company reiterated its fiscal year 2022 diluted non-GAAP EPS guidance range of $5.65 to $5.75, including an estimated 5 to 10 cent positive impact from foreign currency exchange based on recent rates.

"We delivered strong margin improvement, earnings growth, and free cash flow in a tough environment this quarter," said Karen Parkhill, Medtronic chief financial officer. "While we expect our markets to continue to be affected by the pandemic in the second half of our fiscal year, we remain focused on delivering solid revenue growth and strong earnings growth while investing in our robust pipeline."

Webcast Information
Medtronic will host a webcast today, November 23, at 8:00 a.m. EST (7:00 a.m. CST) to provide information about its businesses for the public, investors, analysts, and news media. This webcast can be accessed by clicking on the Investor Events link at investorrelations.medtronic.com and this earnings release will be archived at news.medtronic.com. Medtronic will be live tweeting during the webcast on its Newsroom Twitter account, @Medtronic. Within 24 hours of the webcast, a replay of the webcast and transcript of the company's prepared remarks will be available by clicking on the Investor Events link at investorrelations.medtronic.com.

Medtronic plans to report its fiscal year 2022 third and fourth quarter results on February 22, 2022, and May 26, 2022, respectively. Confirmation and additional details will be provided closer to the specific event.

Financial Schedules
The second quarter financial schedules and non-GAAP reconciliations can be viewed by clicking on the Investor Events link at investorrelations.medtronic.com. To view a printable PDF of the financial schedules and non-GAAP reconciliations, click here. To view the second quarter earnings presentation, click here.