Medtronic
Q2 2023 Earnings Call
Nov 22, 2022, 8:00 a.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
Prepared Remarks:
Geoff Martha
Hello, everyone, and thank you for joining us today as we discuss our Q2 results and outlook. Our Q2 organic constant-currency revenue growth of 2.2% came in about a point below expectations due to a slower-than-expected recovery in both procedure volumes in certain markets and in our supply chain. In terms of reported revenue, the continued strength of the dollar over the course of the quarter drove over half the difference to expectations. Now, despite the top-line results, we were able to control expenses and deliver EPS at the high end of our guidance range.
We also issued guidance for the back half of our fiscal year this morning. We expect continued acceleration in organic revenue growth in the second half, although less than previously anticipated, and this partially flows through to EPS. Now, this is something that I don't take lightly. Delivering on our expectations is important to building and maintaining trust and credibility with you.
Karen will walk you through the details, but some of our markets and some of our supply constraints recovered more slowly than we expected in the quarter, and that, along with incremental China volume-based procurements, led us to reduce our expectations. While the current operating environment remains challenging, we had strong growth in several businesses in geographies, where our strategy, our operating model and execution are yielding solid results. We have near-term product catalysts in our pipeline. We are decisively allocating capital internally and selectively making focused acquisitions.
We're making improvements to the operational health of the company, and we're streamlining the company's structure and taking cost out. All of this gives us confidence that we're on the path to creating durable growth and shareholder value. Now, diving deeper into our Q2 results. For reported revenue, as I said earlier, currency drove over half domestic consensus.
Organically, the miss was primarily split evenly between two challenges. One, procedure volumes in some markets have been slower to return to normal levels. And two, some of our supply challenges have persisted longer than we anticipated. With regard to procedural volumes, in addition to an incremental China VBP, we are still seeing lower volumes in elective coronary PCI, GI procedures, TAVR, spinal cord stim, and some less-emergent surgical procedures.