Medtronic plc (MDT) has reported 25.02 percent fall in profit for the quarter ended Jan. 27, 2017. The company has earned $821 million, or $0.59 a share in the quarter, compared with $1,095 million, or $0.77 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $1,553 million, or $1.12 a share compared with $1,503 million or $1.06 a share, a year ago. Revenue during the quarter grew 5.03 percent to $7,283 million from $6,934 million in the previous year period. Gross margin for the quarter contracted 26 basis points over the previous year period to 68.86 percent. Total expenses were 84.25 percent of quarterly revenues, up from 80.46 percent for the same period last year. That has resulted in a contraction of 379 basis points in operating margin to 15.75 percent.
Operating income for the quarter was $1,147 million, compared with $1,355 million in the previous year period.
However, the adjusted operating income for the quarter stood at $2,051 million compared to $1,930 million in the prior year period. At the same time, adjusted operating margin improved 33 basis points in the quarter to 28.16 percent from 27.83 percent in the last year period.
“In Q3, we achieved solid results across all of our business groups and geographies,” said Omar Ishrak, Medtronic chairman and chief executive officer. “At the same time, we produced meaningful operating profit growth based largely on our synergy programs from the Covidien integration, as well as our focus on operating excellence initiatives.”
For financial year 2017, the company forecasts diluted earnings per share to be in the range of $4.55 to $4.60 on adjusted basis.
Operating cash flow improves significantly
Medtronic plc has generated cash of $5,107 million from operating activities during the nine month period, up 31.22 percent or $1,215 million, when compared with the last year period. The company has spent $1,299 million cash to meet investing activities during the nine month period as against cash outgo of $2,328 million in the last year period.
The company has spent $3,970 million cash to carry out financing activities during the nine month period as against cash outgo of $3,677 million in the last year period.
Cash and cash equivalents stood at $2,768 million as on Jan. 27, 2017, up 1.73 percent or $47 million from $2,721 million on Jan. 29, 2016.
Working capital drops significantly
Medtronic plc has witnessed a decline in the working capital over the last year. It stood at $9,751 million as at Jan. 27, 2017, down 49.81 percent or $9,677 million from $19,428 million on Jan. 29, 2016. Current ratio was at 1.77 as on Jan. 27, 2017, down from 3.39 on Jan. 29, 2016.
Cash conversion cycle (CCC) has decreased to 80 days for the quarter from 154 days for the last year period. Days sales outstanding were almost stable at 66 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 75 days for the quarter compared with 150 days for the previous year period. At the same time, days payable outstanding went down to 60 days for the quarter from 61 for the same period last year.
Debt comes down
Medtronic plc has recorded a decline in total debt over the last one year. It stood at $32,149 million as on Jan. 27, 2017, down 10.28 percent or $3,685 million from $35,834 million on Jan. 29, 2016. Total debt was 32.95 percent of total assets as on Jan. 27, 2017, compared with 34.89 percent on Jan. 29, 2016. Debt to equity ratio was at 0.65 as on Jan. 27, 2017, down from 0.71 as on Jan. 29, 2016. Interest coverage ratio deteriorated to 4.28 for the quarter from 4.93 for the same period last year. Disclaimer: Please note that this is an auto-generated article. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. For queries contact: editor@irisindia.net
