Medtronic Inc. saw its fiscal first-quarter earnings slip, bringing the world’s largest medical device maker to 77 cents per share. According to the Associated Press, gains in its overseas revenue couldn’t counter the losses it sustained domestically.
Tightening hospital budgets in the United States, as well as growing safety concerns, have hurt Medtronic’s sales of heart and spinal devices. As these devices make up a large part of the company’s revenue, that’s a big hit. Now, Medtronic reported a net income of $821 million in the first quarter—a fall from $830 million at the same time last year.
Overseas, however, business is booming. International operations now account for 46 percent of the company’s revenue. In China and the Middle East alone, sales grew 30 percent.
“What we’re seeing is that outside the U.S., that’s where our markets are still growing,” Chief Financial Officer Gary Ellis told the AP. “As we go forward I think you’re going to see that increase, and there’s no reason you shouldn’t see a higher percentage of the total outside the U.S.”
However, Medtronic can’t rely exclusively on business overseas. Sale and favorable currency rates abroad still can’t offset the weakening demand for the company’s heart defibrillators and spinal implants in the U.S. According to the AP, sales for the cardioverter defibrillators fell eight percent, while spinal implant sales fell by $4 million.
Medtronic is counting on its next-generation heart defibrillator to boost sagging domestic sales next quarter.