Medtronic Management Discusses Q1 2013 Results - Earnings Call Transcript

Let me start with the U.S. ICDs. We estimate the market declined approximately 4%, the best it has been in 6 quarters. While the market did see the normal impact of our Q4 to Q1 seasonality, we were pleased to see relative sequential stability. Our U.S. ICD business was down 3% in Q1, slightly better than the market. Pricing was down around 4%, which was consistent with the previous quarter. Our implant volumes were up 4%, but this growth was offset by hospitals reducing their level of bulk purchases, which are now at the lowest level in nearly 5 years. This reduction in bulk purchases is a trend we have seen over the last 4 quarters. And looking ahead, we would expect the stabilization in the U.S. market to continue.

Turning to U.S. Spine. We estimate that U.S. Core Spine market was flat and has now modestly improved over the past 3 quarters. Stabilization was also evident in our own results as our U.S. Core Spine business was flat this quarter. Our business seems to be turning the corner as our new products and procedures gain critical mass. Our continued focus on navigated spinal procedures and enabling technologies, such as POWEREASE, is attracting more surgeon interest and improving our Spine financial results.

Strong capital equipment sales in our Surgical Technologies business further demonstrate the importance of these technologies. And as a result, our U.S. Core Spine share is stable year-over-year, and we estimate we gained modest share sequentially in Q1. Although we are pleased with the progress we are making, it is still very early, and we have to build on this momentum and deliver consistent results over time.

The other part of our U.S. Spine business, BMP, declined 20% in Q1. As you know, questions were raised at -- last year about INFUSE, and to better understand the facts, we requested Yale University to perform an unprecedented systematic analysis of all the available data. While the timing is controlled by Yale, we are expecting the result to be published in the coming months.

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