Along with announcing increases in revenue, Medtronic, Inc., a medical technology company based in Minneapolis, said Tuesday that it will be restructuring its business and reducing its workforce by 4 to 5 percent.
For the third quarter ending Jan. 28 of this year, Medtronic reports worldwide revenue of $3.961 billion, compared to $3.851 billion of the same period in 2010. Third quarter net earnings and diluted earnings per share on a non-GAAP basis increased 8 and 12 percent, respectively, over the same period last year, to $922 million and $0.86. Net earnings and diluted earnings per share increased 11 and 15 percent, respectively, to $924 million and $0.86.
International sales increased by 5 percent to $1.702 billion, or, increased by 7 percent on a constant currency basis after adjusting for a $22 million unfavorable foreign currency impact. International sales make up 43 percent of worldwide revenue. Emerging market revenue increased 26 percent to $350 million, or increased by 23 percent on a constant currency basis.
“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,” said Bill Hawkins, the company’s chairperson and chief executive officer, in a press release announcing the third quarter financial results.
Medtronic’s previously stated fiscal year 2011 diluted earnings per share guidance of $3.38 to $3.44 did not include the impact of the company’s November purchase of Ardian, a company creating an anti-hypertension device. Medtronic now expects fiscal year 2011 diluted earnings per share to be between $3.38 and $3.40.
Despite Medtronic’s positive third quarter financial report, the company will be restructuring its business to align its cost structure to current market conditions and position it for continued long-term sustainable growth, officials said.
“We are delivering on our pipeline to drive share in our core markets and strong growth in emerging technologies,” Hawkins said in the financial results press release. “At the same time, we are restructuring our business and leveraging our global infrastructure to be more in line with market conditions, which positions us well to deliver market-leading performance.”
The company’s restructuring plan includes cost-saving measures, tighter expense management and voluntary programs to minimize involuntary lay offs. The company expects to eliminate 1,500 to 2,000 positions during the fourth quarter.