(Reuters) - Medtronic Plc (MDT.N) topped analysts’ estimates for profit in the fourth quarter as it kept a tight lid on costs and upped sales of its heart valves and insulin pumps, offsetting the impact of hurricane damage to production in Puerto Rico.
Shares of the company rose 3 percent as the company outlined 10 percent and 26 percent rises in sales, respectively, in its units which produce cardiac and vascular devices and equipment for diabetics.
That quelled concerns among analysts that events in Puerto Rico and a network service outage which affected the medical device maker’s distribution, ordering and manufacturing would again weigh on results.
“Relative to nervousness that investors have come to expect around Medtronic’s earnings releases, we thought the fourth-quarter print was solid,” Evercore ISI analyst Vijay Kumar said.
The company launched a restructuring plan in January that it hopes will save $500 million to $700 million annually over the next five years and Reuters calculations showed total costs fell to $6.21 billion from $6.29 billion.
Sales across Medtronic’s business units beat analysts’ estimates, according to Thomson Reuters I/B/E/S, and the company forecast an adjusted profit of $5.10 to $5.15 per share for fiscal 2019 compared to expectations of $5.14.
“We view this as conservative based upon recent new products and others in the new product pipeline, and ongoing cost-control initiatives,” Edward Jones analyst John Boylan said.
Rival Edwards lifesciences (EW.N) said last month that growth in procedures using its transcatheter heart valves in Europe had been hampered by a shift in market share to Medtronic.
Sales at Medtronic’s coronary & structural heart sub-unit, which houses the transcatheter valves, rose 18.7 percent to $1.01 billion.
Sales in the broader cardiac and vascular business jumped 10.1 percent to $3.14 billion, beating an average estimate of $3.1 billion while those in the diabetes unit rose 26 percent to $645 million, helped by demand for its new sensor-augmented insulin pumps.
“We know that there’s much work to be done, but we’re as excited and optimistic as our direction is,” Chief Executive Officer Omar Ishrak said on a call with analysts.
Net income attributable to the company jumped 25.5 percent to $1.46 billion, or $1.07 per share, in the quarter ended April 27. Excluding items, the company earned $1.42 per share, beating the average analyst estimate of $1.39.
Reporting by Manas Mishra in Bengaluru; Editing by Shailesh Kuber and Maju Samuel