Medtronic 2Q13 Earnings Call Notes

posted in: Notes | 0

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

“While our international operations performed well, growing 9%, our U.S. business declined 1%. This was driven by pressures in three distinct areas, CRDM implants, PAINSTIM and diabetes”

“the Chinese government is looking at pricing very carefully and probably as they should. But in our view most of that is directed around go-to-market models using distributors, which we are looking at very carefully. It’s a market where we eventually have to have more direct presence with the customers themselves. Now the way we have traditionally gone to market we use distributors for a variety of reasons, a lot of those extremely necessary.”

“Well, look our outlook for emerging markets overall has not changed. We are confident that we can deliver between 15% and 20% quite reliably, and are striving to make that thing 20% or more. And in certain regions we actually have shown consistency at over 20% for an extended period of time. China, we haven’t been able to do that although our growth rate has consistently been 15% or better and have touched 20% every so often. And China is the biggest market, so we are very focused on driving that up as quickly as possible.”

“You know there may well be issues to do with government policy and all of that but in general healthcare is a tremendous need in China and access to healthcare is a big focus of the government. And we are making investments within China.”

“In India, the bigger issue other than the distributor transition which we also went through for other reasons, is that the government has imposed a very low ceiling on pricing for some of the stents…it was a dramatic change to the system and essentially it forced sales from not only us but all multinationals”

“the biggest issue was getting people on contracts. And that’s the change that’s probably occurred over in the industry over the last several years where what used to be maybe just a little price increase (inaudible) and immediately the doctors to make that call and that decision. Obviously with the buying decisions now in hospitals, these committees are more engaged in that process and ensuring that the products have the technology. So as he indicated, that slows down the process slightly. It doesn’t mean you don’t get the price increases. It just means that you have to go through certain processes.”