(Reuters) - Medtronic Plc (MDT.N) posted a better-than-expected quarterly profit on Tuesday, helped by strong sales of its diabetes and heart devices, sending the medical device maker’s shares up as much as 4.9 percent to a record high.
Dublin-based Medtronic’s performance was in line with other device makers such as Boston Scientific Corp (BSX.N) and Baxter International Inc (BAX.N) that have also reported stronger-than-expected quarterly results.
The largest U.S. standalone device maker’s diabetes unit that makes insulin pumps and glucose monitoring systems posted a 27 percent rise in sales, largely due to strong adoption of its artificial pancreas device in the U.S.
Medtronic’s monitoring system, Guardian Connect, that continuously keeps track of glucose levels in diabetic patients also helped push sales of the unit.
“The diabetes segment is the fastest growing segment in the company and there is a lot of momentum in this franchise,” BMO Capital Markets analyst Joanne Wuensch said.
Chief Executive Officer Omar Ishrak said Medtronic was excited about its progress in the diabetes market, and expects the company to be in the leadership position in the segment.
The company’s top-selling cardiac and vascular unit that makes defibrillators, pace-makers, heart valves and stents raked in revenue of $2.81 billion, beating analysts’ estimate of $2.77 billion, according to Thomson Reuters I/B/E/S.
Evercore ISI analyst Vijay Kumar said all eyes were focused on Medtronic’s first-quarter print given the recent run in stock and the company came through solidly and beat the high end of expectations.
“What impressed us was the solid all-around performance across all the segments, and growth was balanced across geographies,” he added.
Medtronic, which bought Covidien for $42.9 billion in 2015 to shift its tax base to Ireland, said it would focus on smaller tuck-in acquisitions.
For fiscal year 2019, the company said it is increasing its organic revenue growth guidance to a range of 4.5 to 5.0 percent from a range of 4.0 to 4.5 percent.
Net income attributable to Medtronic rose to $1.08 billion, or 79 cents per share, in the first quarter ended July 27, from $1.02 billion, or 74 cents per share, a year earlier.
Excluding items, it earned $1.17 per share, beating analysts’ expectations of $1.11 per share.
Net sales fell marginally to $7.38 billion, but still came above the average analyst estimate of $7.24 billion.
The company’s shares were trading up 4 percent at $93.74. The stock had risen nearly 12 percent in the year through Monday’s close.
Reporting by Saumya Sibi Joseph and Aakash Jagadeesh Babu in Bengaluru; Editing by Shailesh Kuber