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Medtronic’s Minimally Invasive Therapies Group in 3Q18

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Overview

In fiscal 3Q18, Medtronic’s (MDT) MITG (Minimally Invasive Therapies Group) continued to perform poorly, reporting a YoY (year-over-year) decline of ~16% due to the divestiture of the company’s PMR (Patient Monitoring and Recovery) business in fiscal 2Q18. For details, please read Divestiture of a Part of Medtronic’s PMR Business to Cardinal Health.

However, on a constant-currency basis, the business grew ~6% in fiscal 3Q18. The segment’s SI (Surgical Innovations) and RGR (Respiratory, Gastrointestinal, and Renal) division reported constant-currency sales growth of ~7% and 3%, respectively.

Due to the MITG business showing a strong recovery after the divestiture of its PMR business, the company continues to expect MITG sales growth of 3.0%–3.5% in fiscal 2018.

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Major factors that affected MITG’s 3Q18 performance

The MITG segment’s SI business was driven by new product launches, including that of Signia powered surgical stapling systems, Ligasure vessel-sealing instruments, and the Valleylab FT10 energy platform. The RGR business division grew ~3%, driven by growth in the company’s gastrointestinal, hepatology, and Nellcor pulse oximetry sensor businesses, and the continued adoption of Microstream capnography monitoring products. However, Medtronic expects the launch of its surgical robotics platform, a major growth driver for the company, to be delayed. Peers Boston Scientific (BSX), Edwards Lifesciences (EW), and Abbott Laboratories (ABT) registered sales of $2.4 billion, $0.89 billion, and $7.6 billion, respectively, in their recently ended quarters.

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