Despite a promising start to its 2022 fiscal year that featured a 20% year-on-year increase in first quarter revenue, medical device supplier Medtronic is seeing its earnings growth all but flatline. The killer combination of seemingly unceasing COVID-19 variants, global supply chain complications, and a recently compounding dearth of healthcare talent has sent the company into a slide where its second-quarter gains landed at only 3%. The latest three-month stretch has continued the trend; Medtronic's over $7.5 billion in revenue was 1% lower than the previous quarter and 0.2% under its earnings for 2021's third quarter.
Addressing his company's ho-hum performance of late, Chief Executive Officer Geoff Martha pointed specifically to the impact of COVID-19's unpredictable ebbs and flows. “The impact of the COVID-19 resurgence on healthcare procedure volumes, particularly in the United States, peaked in the final weeks of our quarter in January, causing our revenue to fall short of our expectations,” she said. “We expect healthcare procedures to reaccelerate post-omicron, and our commitment to durable and higher growth remains steadfast.”
The worst drop-off occurred in Medtronic's diabetes segments, which earned just $584 million, representing an overall 7% year-on-year loss. The segment's business in the U.S. fell even lower, with a 17% decline, but low-double digit growth in glucose monitoring tech sales on the international scale somewhat mitigates the damage. Neuroscience, medical surgical, and cardiovascular, the company's other three flagship businesses, have essentially leveled out in terms of third-quarter revenue.
