Benzinga | Nov 23, 2021 08:03AM EST

Medtronic Q2 Sales Hit By By Labor Shortage, COVID-19; Expects Lower Sales Growth Rate For FY22

Medtronic Plc's (NYSE:MDT) Q2 FY22 sales of $7.85 billion increased 3% Y/Y as reported and 2% on an organic basis, missing the consensus of $7.96 billion. Q2 adjusted EPS of $1.32 increased 30% from $1.02 a year ago, surpassing the analyst consensus of $1.29.

* The company says that the Q2 results reflect the unfavorable market impact of COVID-19 and health system labor shortages on medical device procedure volumes, primarily in the U.S.

* Sales at Medtronic's heart devices unit jumped 3.7% Y/Y (3.3% on constant currency) to $2.83 billion.

* Spine & neurosurgery product segment sales increased 3.5% (3.1% constant currency) to $2.14 billion.

* Diabetes revenue of $585 million increased 2% as reported and 1% organic.

* Guidance: Medtronic expects the market impact of the pandemic and healthcare system staffing challenges to continue into the H2 of FY22.

* It now forecasts FY22 revenue growth of 7-8% on an organic basis versus the prior expectation of approximately 9%

* Medtronic reiterated its adjusted EPS guidance of $5.65 - $5.75 (consensus of $5.71).

* Price Action: MDT shares are down 0.50% at $116.3 during the premarket session on the last check Tuesday.