Like many of its peers, including Boston Scientific and Johnson & Johnson, Medtronic’s business has been impacted by procedure deferrals as healthcare systems around the world have deferred most elective procedures to focus on COVID-19.
While certain Medtronic products are in high demand due to COVID-19, an update from the company shows that the vast majority of its businesses have experienced declines during the global pandemic.
Medtronic said it expects COVID-19 to negatively affect its fiscal fourth quarter financial results, which ends Friday. Given the progression of COVID-19 around the world and the timing of the company’s fiscal quarter, Medtronic’s fourth quarter includes an additional month of impact compared to companies that operate on a calendar-based fiscal year.
Like many of its peers, including Boston Scientific and Johnson & Johnson, Medtronic’s business has been impacted by procedure deferrals as healthcare systems around the world have deferred most elective procedures to focus on COVID-19. The Dublin, Ireland-based company said capital equipment purchases, outside of ventilators and patient monitoring equipment, are also being deffered by hospitals during the pandemic.
Medtronic also noted that it expects an incremental negative impact to revenue from a decline in large customer orders that the company typically receives at the end of its fiscal year because customers are prioritizing cash and cutting back on spending, especially for products used in elective procedures.
Medtronic products that are in high demand as a result of COVID-19 include extracorporeal life support products such as extracorporeal membrane oxygenation machines and disposables, ventilators, pulse oximetry devices, capnography products, advanced parameter monitoring products, and diabetes supplies. Together, these product lines represented roughly 10% of Medtronic’s pre-COVID-19 global revenue, the company said.
By Amanda Pedersen | MD+DI
Image Credit: Medtronic
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