VOL. 126 | NO. 37 | Wednesday, February 23, 2011
Medtronic Q3 Income Up, Layoffs Coming
By Aisling Maki
As Medtronic Inc. Tuesday announced an increase in its third quarter net income, the company also said it would reduce its global workforce by 1,500 to 2,000 employees, or 4 to 5 percent of its workforce, during the fourth quarter.
Based in Minneapolis, Medtronic is the world’s largest manufacturer of medical devices. The company’s Spinal and Biologics Business is in Memphis at 1800 Pyramid Place.
The company said in order to align its cost structure to current market conditions and continue to position Medtronic for long-term sustainable growth, it will restructure its business through a combination of cost-saving measures, tighter expense management and voluntary programs to minimize layoffs.
It’s unknown at this time whether Memphis will be affected by the layoffs.
“We don’t have exact numbers for any specific site or business or region,” Medtronic spokesman Brian Henry told The Daily News. “We’re going to do what’s necessary to bring the overall business into alignment with the current market conditions.”
For the third quarter, which ended Jan. 28, the company reported revenue of $3.96 billion, compared to $3.85 billion in Q3 2010 – an increase of 3 percent on a constant currency basis and as reported.
Third quarter net earnings and diluted earnings per share were $924 million and 86 cents, respectively, an increase of 11 percent and 15 percent compared to the same period in 2010. Adjusted earnings were $922 million and 86 cents compared to the same period last year.
Medtronic reported a renewed growth in Spinal, which produced $861 million in revenue, a 2 percent increase. The company said it believes global spine market growth has remained stable compared to the prior quarter. Core Spinal revenue declined 1 percent, but included Core Metal Construct growth of 2 percent.
Meanwhile, Biologics revenue increased 10 percent on a constant currency basis, driven by stabilizing InFuse sales, a strong performance in Other Biologics, and the acquisition of New Jersey-based Osteotech, which in November became part of Medtronic’s Memphis Spinal and Biologics Business, enabling the company to expand its product line and enter new markets.
In January, Medtronic launched the CD Horizon Solera Spinal System, part of a family of devices designed to provide spinal stabilization and correction as an adjunct to fusion in patients suffering from painful disorders of the middle and lower back.
“Our newly launched products are clearly capturing the interest of both physicians and patients, setting the stage for solid future performance and continued leadership for Medtronic,” Bill Hawkins, Medtronic CEO and chairman, said in a statement.