Ventilator demand breathes life into Medtronic’s quarterly profit
World's largest medical device maker teamed up Tesla and has increased production of ventilators from 200 units a week to more than 1,000
Bengaluru — Medtronic beat quarterly profit estimates on Tuesday, as coronavirus driven demand for ventilators helped offset the impact of lower medical device sales.
Several medical device makers have benefited in the latest reported quarter from strong demand for Covid-19 related products such diagnostic tests, respirators and ventilators, which helped soften the blow from delayed non-emergency procedures that affected device sales.
Rivals such as Abbott Laboratories and Becton Dickinson gained from robust demand for their Covid-19 tests.
Medtronic said demand for less urgent surgeries continued to improve from the lows experienced during the peak of the Covid-19 pandemic, which was in line with its August projection of the recovery in the back half of the year.
Shares of the world's largest stand-alone medical device maker were up about 1% at $112.34 before the bell.
Medtronic has been ramping up production of its ventilators amid a surge in demand from severely ill Covid-19 patients. It said in August it boosted production from 200 units a week to more than 1,000.
The company has partnered with Foxconn and US electric-vehicle maker Tesla to ramp up their production after governments across the globe appealed to carmakers and aerospace companies to help procure or make ventilators and other medical equipment.
Medtronic said ventilator sales increased nearly fourfold in the second quarter, as it raised production of its PB980 high-acuity ventilator to address global demand.
Excluding items, Medtronic earned $1.02 per share in the second quarter, beating analysts' expectation of 80c per share, according to Refinitiv IBES data.
Given the uncertainty on near-term financial results caused by the Covid-19 pandemic, the company said it will not provide annual or quarterly financial targets.
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