=Medtronic (MDT) reported earnings on Tue 11/22/16 (b/o)

Medtronic beats by $0.01, misses on revs; guides FY17 EPS below consensus; tempers top line growth forecast :

• Reports Q2 (Oct) earnings of $1.12 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus of $1.11; revenues rose 4.1% year/year to $7.34 bln vs the $7.46 bln Capital IQ Consensus; +3% ex-FX.
• Co issues downside guidance for FY17, sees EPS of $4.55-4.60, excluding non-recurring items, vs. $4.65 Capital IQ Consensus, including an estimated negative impact from foreign currency to fiscal year 2017 EPS of 20 to 22 cents, assuming current exchange rates remain similar for the rest of the year.
  • The company continues to expect fiscal year 2017 diluted non-GAAP EPS growth to be in the double digits on a constant currency, constant week basis, which is consistent with the company's long-term, double digit constant currency EPS growth expectation. The company expects non-GAAP diluted EPS growth for the second half of fiscal year 2017 to be in the 8 percent to 10 percent range on a constant currency basis.
  • Consistent with the company's long-term, mid-single digit constant currency revenue growth expectation, the company now expects fiscal year 2017 revenue growth to be within the mid-single digit range on a constant currency, constant weeks basis, as opposed to the upper half of the mid-single digit range signaled previously. The company expects revenue growth for the second half of fiscal year 2017 to also be in the mid-single range on a constant currency basis. While the impact from foreign currency is fluid, if current exchange rates remain similar for the remainder of the fiscal year, the company's full year revenue would be negatively affected by ~$20 million to $60 million, including an approximate $10 million to $30 million negative impact in the third fiscal quarter.
• "Q2 revenue was disappointing and did not meet our expectations. We faced issues that affected our growth, including slower than expected revenue as we await new product introductions, particularly in CVG and Diabetes," said Omar Ishrak, Medtronic chairman and chief executive officer. "Despite this revenue shortfall, we produced a strong improvement in operating margins and double digit constant currency earnings per share growth... While some of the challenges that affected revenue in Q2 could persist in the near term, we remain confident in our ability to deliver mid-single digit constant currency revenue growth and double-digit constant currency EPS growth, not only in our current fiscal year, but on a sustained basis into the future."