Medtronic 2Q14 Earnings Call Notes

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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. Full transcripts can be found at Seeking Alpha

4% topline growth

” first quarter revenue of $4.3 billion which represents growth of 4% and Q1 non-GAAP diluted earnings per share of $0.93 growing 6%”

North America grew faster than the total

“in the U.S. where we grew 6%, the highest growth in this region for five years. We believe mid-single digit growth in the U.S. can be sustained over the coming quarters based on the momentum of our new products. Therapy innovation contributed over half of our global growth this quarter.”

Inversion about being more competitive on foreign profits

“Medtronic will continue to pay significant U.S. taxes and increase our investments in the U.S. On taxes, we will continue to pay federal, state, and local income taxes on all U.S. earnings as well as Social Security taxes, property taxes, and the medical device tax. Cumulatively, these taxes represent more than 45% of U.S. income and we expect to pay a similar rate post-close. In addition, this transaction will put us on an even playing field with foreign companies regarding use of internationally-generated profits”

emerging markets can power growth for decades

” Look, we view emerging markets, like I said before, as a key growth driver not just for the next few years but for decades, literally decades because that’s the nature of the opportunity. We’re only addressing the premium segment when we get to value segment and the underserved, this is going to go on for a very long time.

And as a result, if you really talk of the long term, the revenues from these regions will be big and certainly at par with what we get from developed markets. And we cannot have in that kind of a scenario go through indirect channels of – where we do not have direct control with respect not only to business conduct standards, but also and more importantly with respect to direct connection with our customers because we have to develop these markets”