By Will Feuer


Medtronic PLC posted a 3% drop in sales for the fiscal second quarter as the strong U.S. dollar wiped out sales gains and a slower-than-expected recovery in procedure volumes weighed on results.

The medical-technology and services company reported net income of $427 million, or 32 cents a share, for the quarter ended Oct. 28, compared with $1.31 billion, or 97 cents a share, in the same period a year ago. The recent quarter included a $764 million income-tax-reserve adjustment that was a direct result of a U.S. Tax Court opinion issued in the quarter.

The company said its earnings decline also reflects the continued macroeconomic effect of inflation on materials, labor, freight and utilities.

Stripping out one-time items, including amortization, adjusted earnings were $1.30 a share. Analysts polled by FactSet had been expecting $1.28 a share.

Sales for the quarter fell to $7.59 billion from $7.85 billion, below analyst expectations of $7.70 billion, according to FactSet. Currency fluctuations reduced revenue by $457 million, the company said. Organic revenue, which strips out effects from currency translation, rose 2%.

"We're taking decisive actions to improve the performance of the company," Chief Executive Geoff Martha said.

The company said its organic revenue results reflected lower-than-expected market procedure volumes in certain businesses as well as the pricing effect of volume-based procurement in China. The company said it saw strength in certain product lines, including cardiac pacing, transcatheter aortic valves and core spine in the U.S.

Shares fell 3% in premarket trading, to $79.65.


Write to Will Feuer at Will.Feuer@wsj.com


(END) Dow Jones Newswires

11-22-22 0726ET