Healthcare stock to watch: Medtronic PLC (NYSE: MDT)

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Medtronic PLC (NYSE: MDT) reported better than expected results for the second quarter of FY 20 and raised its full-year profit outlook boosted by strong performance in its unit that makes surgical instruments. The company’s net income for the quarter rose to $1.36 billion from $1.12 billion, in the year-ago period. For the second quarter, the company posted the 61% growth in Cash Flow from Operations to $1.9 Billion and 66% increase in the Free Cash Flow to $1.6 Billion.

In the Minimally Invasive Therapies Group, the company had another very strong quarter, as it grew 6.1% and ahead of expectations, on the back of strong performances in both surgical innovations and RGR.

In Surgical innovations, the company has grown by mid-single-digits in both Advanced Stapling and Advanced Energy. Advanced Stapling growth is due to the new products in the Tri-Staple line, including the EEA circular stapler and Tri-Staple 2.0 re-loads.

Advanced Energy grew due to the continuous innovation in the LigaSure Franchise, including the LigaSure Exact Dissector. Respiratory GI and Renal grew 6.1% in the quarter. The GI Solutions business grew high single-digits due to strong sales of Bravo calibration-free reflux system, EndoFLIP imaging systems and PillCam systems. Respiratory and patient monitoring also posted the growth in high-single-digits, due to Nellcor Pulse Oximetry, Microstream capnography, and BIS brain monitoring consumables, Puritan Bennett 980 ventilators and McGRATH video laryngoscopes.

In the Cardiac and Vascular Group, the company grew 1.3% in the quarter, which was in line with the company’s expectations

MDT in the second quarter of FY 20 has reported the adjusted earnings per share of $1.31, beating the analysts’ estimates for the adjusted earnings per share of $1.28, according to the FactSet consensus. The company had reported the adjusted revenue growth of 3 percent to $7.71 billion in the second quarter of FY 20, beating the analysts’ estimates for revenue of $7.66 billion. The minimally invasive therapies business, has posted the revenue of $2.14 billion, ahead of analysts’ average estimate of $2.13 billion, according to IBES data from Refinitiv.

But its cardiac and vascular unit missed estimates for revenue as it reported the revenue of $2.86 billion, while analysts had expected $2.87 billion.

For fiscal 2020, the company has affirmed its revenue growth outlook of 4% but raised its adjusted earnings per share guidance range to $5.57 to $5.63 from $5.54 to $5.60. The analysts were expecting full-year earnings of $5.56 per share.

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