Medtronic plc (MDT) has reported a 5.86 percent fall in profit for the quarter ended Jul. 31, 2015. The company has earned $820 million, or $0.57 a share in the quarter, compared with $871 million, or $0.87 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $1,462 million, or $1.02 a share compared with $992 million or $0.99 a share, a year ago. Revenue during the quarter surged 70.23 percent to $7,274 million from $4,273 million in the previous year period. Gross margin for the quarter contracted 790 basis points over the previous year period to 66.24 percent. Total expenses were 84.45 percent of quarterly revenues, up from 74.54 percent for the same period last year. That has resulted in a contraction of 991 basis points in operating margin to 15.55 percent.
Operating income for the quarter was $1,131 million, compared with $1,088 million in the previous year period.
However, the adjusted operating income for the quarter stood at $1,976 million compared to $1,246 million in the prior year period. At the same time, adjusted operating margin contracted 199 basis points in the quarter to 27.17 percent from 29.16 percent in the last year period.
"Our first quarter results represent a strong start to fiscal year 2016, with all four of our groups contributing to revenue growth that was at the upper end of our goal when adjusted for the extra week. We are driving solid growth in the United States and seeing broad acceptance of our innovative therapies around the world," said Omar Ishrak, Medtronic chairman and chief executive officer.
For financial year 2016, Medtronic plc expects revenue to grow in the range of 4 percent to 6 percent. The company projects diluted earnings per share to be in the range of $4.30 to $4.40 on adjusted basis.
Operating cash flow improves significantly
Medtronic plc has generated cash of $816 million from operating activities during the quarter, up 163.23 percent or $506 million, when compared with the last year period.
The company has spent $986 million cash to meet investing activities during the quarter as against cash outgo of $6 million in the last year period.
The company has spent $1,744 million cash to carry out financing activities during the quarter as against cash outgo of $355 million in the last year period.
Cash and cash equivalents stood at $2,979 million as on Jul. 31, 2015, up 122.98 percent or $1,643 million from $1,336 million on Jul. 25, 2014.
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