Medtronic announced financial results for its second quarter of fiscal year 2023, which ended October 28, 2022.
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The company reported worldwide revenue of $7.585 billion, a decrease of 3% as reported and an increase of 2% on an organic basis.
The organic comparison excludes a $457 million negative impact from foreign currency translation and a $25 million contribution from the company's fiscal first quarter acquisition of Intersect ENT, which is reported in the Specialty Therapies division in the Neuroscience Portfolio.
Unless otherwise stated, all revenue growth rates in this press release are on an organic basis, which excludes the impact of foreign currency translation and revenue from the Intersect ENT acquisition.
The company's second quarter organic revenue results reflect slower supply recovery or lower than anticipated underlying market procedure volumes in certain businesses and the pricing impact of volume-based procurement in China.
These challenges were partially offset by strength in certain product lines, including Transcatheter Aortic Valves (TAVR), Cardiac Pacing, Core Spine in the United States, and Diabetes in International.
As reported, second quarter GAAP net income and diluted earnings per share (EPS) were $427 million and $0.32, respectively, both decreases of 67%.
Second quarter non-GAAP net income and non-GAAP diluted EPS were $1.725 billion and $1.30, respectively, decreases of 4% and 2%, respectively.
Included in the company's GAAP earnings is a $764 million income tax reserve adjustment that was a direct result of the previously disclosed U.S. Tax Court opinion issued in the fiscal second quarter. The company's earnings decline also reflects the continued macroeconomic impact of inflation on materials, direct labor, freight, and utilities.
Second quarter U.S. revenue of $4.069 billion represented 54% of company revenue and increased 2% as reported and 1% organic.
Non-U.S. developed market revenue of $2.157 billion represented 28% of company revenue and decreased 13% as reported and increased 3% organic.
Emerging Markets revenue of $1.359 billion represented 18% of company revenue and decreased 1% as reported and increased 4% organic. ■