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Medtronic plc (MDT - Free Report) reported adjusted earnings per share (EPS) of $1.23 for first-quarter fiscal 2025, up 2.5% from the year-ago quarter’s figure. The figure also beat the Zacks Consensus Estimate by the same magnitude. Currency-adjusted EPS for the reported quarter was $1.29.
Without certain one-time adjustments — including amortization, restructuring and associated costs, certain litigation charges and acquisition-related costs, among others — GAAP EPS was 80 cents, a 35.6% improvement from the year-ago quarter’s reported figure.
Total Revenues
Worldwide revenues in the reported quarter grossed $7.92 billion, up 2.8% year over year on a reported basis and 5.3% on an organic basis. The top line exceeded the Zacks Consensus Estimate by 0.2%.
The company's organic revenues reflect broad-based growth across the company, with growth in all four major segments.
Segment Details
The company generates revenues from four major segments, namely Cardiovascular Portfolio, Medical Surgical Portfolio, Neuroscience Portfolio and Diabetes.
In the fiscal first quarter, Cardiovascular revenues increased 6.9% organically to $3.01 billion.
Within this, Cardiac Rhythm & Heart Failure sales totaled $1.54 billion, up 7.5% year over year organically. Revenues from Structural Heart & Aortic were up 6.6% organically to $856 million. Coronary & Peripheral Vascular revenues were up 5.8% year over year to $616 million.
In the Medical Surgical portfolio, worldwide sales totaled $1.99 billion, up 1% year over year organically. Within this, while Surgical & Endoscopy revenues moved up 1.3% organically to $1.54 billion, Acute Care & Monitoring revenues dropped 0.1% to $452 million.
In Neuroscience, worldwide revenues of $2.32 billion were up 5.3% year over year organically. Cranial & Spinal Technologies sales reached $1.15 billion, up 4.8% year over year organically. Specialty Therapies revenues were $713 million, up 3.4% year over year. Neuromodulation reported 9.6% organic growth to $457 million.
Revenues in the Diabetes group rose 12.6% organically to $647 million. U.S. revenues grew in the mid-teens on the continued adoption of the MiniMed 780G automated insulin delivery system. International revenues grew by low double digits on increasing CGM attachment rates and the continued rollout of Simplera Sync.
Gross margin in the reported quarter contracted 76 basis points (bps) to 65.1% on a 5.1% rise in the cost of revenues.
Research and development expenses rose 1.2% year over year at $676 million. Selling, general and administrative expenses rose 1.6% to $2.66 billion.
Adjusted operating margin contracted 25 bps year over year to 23%.
Guidance
Medtronic updated its fiscal 2025 guidance.
For fiscal 2025, organic revenue growth is expected to be in the range of 4.5-5% (compared with the previous projection of 4-5% growth). The organic revenue growth guidance excludes the impact of foreign currency and revenues related to certain businesses reported as Other. Including Other revenues and the impact of foreign currency exchange, if recent foreign currency exchange rates hold, fiscal 2025 revenue growth on an adjusted basis is likely to be in the range of 3.4-4.3%.
The Zacks Consensus Estimate for the company’s fiscal 2025 worldwide revenues is pegged at $33.42 billion, implying 3.3% growth from the year-ago reported figure.
Full-year adjusted EPS is projected in the range of $5.42-$5.50 (compared with the earlier projection of $5.40-$5.50). The Zacks Consensus Estimate for the year’s adjusted earnings is pegged at $5.42 per share.
Our Take
Medtronic recorded earnings and revenue beat in the fiscal first quarter. Broad-based, durable growth across the company, including Cardiac Rhythm & Heart Failure, Structural Heart & Aortic, Cranial & Spinal Technologies and Diabetes businesses, looks encouraging. Several new regulatory approvals and launches across the company’s businesses significantly contributed to the growth in the reported quarter. Among major updates, the Evolut FX+ TAVR system saw limited U.S. commercial release during the quarter, with the full market release now underway. Within Diabetes, Medtronic received FDA approval for Simplera CGM and announced a global partnership with Abbott to complement future Medtronic-integrated CGM offerings.
Medtronic raised the lower end of its earlier-provided earnings and revenue guidance.
However, macroeconomic headwinds related to persistent cost escalations and unfavorable foreign currency movements continue to challenge the company’s margin performance.
Zacks Rank & Key Picks
Medtronic currently carries a Zacks Rank #3 (Hold).
Intuitive Surgical reported second-quarter 2024 adjusted EPS of $1.78, which beat the Zacks Consensus Estimate by 16.3%. Revenues of $2.01 billion topped the consensus estimate by 2%.
Intuitive Surgical has a projected earnings growth rate of 16.1% for 2024 compared with the industry’s 14.1%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.97%.
TransMedics reported second-quarter 2024 earnings of 35 cents per share, which surpassed the Zacks Consensus Estimate by 66.7%. Revenues of $114.3 million topped the Zacks Consensus Estimate by 15.9%.
TMDX has a projected earnings growth rate of 51.7% for 2025 compared with the S&P 500’s 11.3%. The company beat on earnings in each of the trailing four quarters, the average surprise being 287.50%.
Quest Diagnostics reported second-quarter adjusted EPS of $2.35, which surpassed the Zacks Consensus Estimate by 1.7%. Revenues of $2.40 billion outpaced the Zacks Consensus Estimate by 0.5%.
DGX has a historical five-year earnings growth rate of 7.4% compared with the industry’s 4.2%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.31%.
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Medtronic (MDT) Q1 Earnings Beat, Fiscal 2025 View Narrowed
Medtronic plc (MDT - Free Report) reported adjusted earnings per share (EPS) of $1.23 for first-quarter fiscal 2025, up 2.5% from the year-ago quarter’s figure. The figure also beat the Zacks Consensus Estimate by the same magnitude. Currency-adjusted EPS for the reported quarter was $1.29.
Without certain one-time adjustments — including amortization, restructuring and associated costs, certain litigation charges and acquisition-related costs, among others — GAAP EPS was 80 cents, a 35.6% improvement from the year-ago quarter’s reported figure.
Total Revenues
Worldwide revenues in the reported quarter grossed $7.92 billion, up 2.8% year over year on a reported basis and 5.3% on an organic basis. The top line exceeded the Zacks Consensus Estimate by 0.2%.
The company's organic revenues reflect broad-based growth across the company, with growth in all four major segments.
Segment Details
The company generates revenues from four major segments, namely Cardiovascular Portfolio, Medical Surgical Portfolio, Neuroscience Portfolio and Diabetes.
In the fiscal first quarter, Cardiovascular revenues increased 6.9% organically to $3.01 billion.
Within this, Cardiac Rhythm & Heart Failure sales totaled $1.54 billion, up 7.5% year over year organically. Revenues from Structural Heart & Aortic were up 6.6% organically to $856 million. Coronary & Peripheral Vascular revenues were up 5.8% year over year to $616 million.
In the Medical Surgical portfolio, worldwide sales totaled $1.99 billion, up 1% year over year organically. Within this, while Surgical & Endoscopy revenues moved up 1.3% organically to $1.54 billion, Acute Care & Monitoring revenues dropped 0.1% to $452 million.
In Neuroscience, worldwide revenues of $2.32 billion were up 5.3% year over year organically. Cranial & Spinal Technologies sales reached $1.15 billion, up 4.8% year over year organically. Specialty Therapies revenues were $713 million, up 3.4% year over year. Neuromodulation reported 9.6% organic growth to $457 million.
Revenues in the Diabetes group rose 12.6% organically to $647 million. U.S. revenues grew in the mid-teens on the continued adoption of the MiniMed 780G automated insulin delivery system. International revenues grew by low double digits on increasing CGM attachment rates and the continued rollout of Simplera Sync.
Medtronic PLC Price, Consensus and EPS Surprise
Medtronic PLC price-consensus-eps-surprise-chart | Medtronic PLC Quote
Margins
Gross margin in the reported quarter contracted 76 basis points (bps) to 65.1% on a 5.1% rise in the cost of revenues.
Research and development expenses rose 1.2% year over year at $676 million. Selling, general and administrative expenses rose 1.6% to $2.66 billion.
Adjusted operating margin contracted 25 bps year over year to 23%.
Guidance
Medtronic updated its fiscal 2025 guidance.
For fiscal 2025, organic revenue growth is expected to be in the range of 4.5-5% (compared with the previous projection of 4-5% growth). The organic revenue growth guidance excludes the impact of foreign currency and revenues related to certain businesses reported as Other. Including Other revenues and the impact of foreign currency exchange, if recent foreign currency exchange rates hold, fiscal 2025 revenue growth on an adjusted basis is likely to be in the range of 3.4-4.3%.
The Zacks Consensus Estimate for the company’s fiscal 2025 worldwide revenues is pegged at $33.42 billion, implying 3.3% growth from the year-ago reported figure.
Full-year adjusted EPS is projected in the range of $5.42-$5.50 (compared with the earlier projection of $5.40-$5.50). The Zacks Consensus Estimate for the year’s adjusted earnings is pegged at $5.42 per share.
Our Take
Medtronic recorded earnings and revenue beat in the fiscal first quarter. Broad-based, durable growth across the company, including Cardiac Rhythm & Heart Failure, Structural Heart & Aortic, Cranial & Spinal Technologies and Diabetes businesses, looks encouraging. Several new regulatory approvals and launches across the company’s businesses significantly contributed to the growth in the reported quarter. Among major updates, the Evolut FX+ TAVR system saw limited U.S. commercial release during the quarter, with the full market release now underway. Within Diabetes, Medtronic received FDA approval for Simplera CGM and announced a global partnership with Abbott to complement future Medtronic-integrated CGM offerings.
Medtronic raised the lower end of its earlier-provided earnings and revenue guidance.
However, macroeconomic headwinds related to persistent cost escalations and unfavorable foreign currency movements continue to challenge the company’s margin performance.
Zacks Rank & Key Picks
Medtronic currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are Intuitive Surgical (ISRG - Free Report) , TransMedics Group (TMDX - Free Report) and Quest Diagnostics (DGX - Free Report) . While Intuitive Surgical and TransMedics sport a Zacks Rank #1 (Strong Buy), Quest Diagnostics carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Intuitive Surgical reported second-quarter 2024 adjusted EPS of $1.78, which beat the Zacks Consensus Estimate by 16.3%. Revenues of $2.01 billion topped the consensus estimate by 2%.
Intuitive Surgical has a projected earnings growth rate of 16.1% for 2024 compared with the industry’s 14.1%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.97%.
TransMedics reported second-quarter 2024 earnings of 35 cents per share, which surpassed the Zacks Consensus Estimate by 66.7%. Revenues of $114.3 million topped the Zacks Consensus Estimate by 15.9%.
TMDX has a projected earnings growth rate of 51.7% for 2025 compared with the S&P 500’s 11.3%. The company beat on earnings in each of the trailing four quarters, the average surprise being 287.50%.
Quest Diagnostics reported second-quarter adjusted EPS of $2.35, which surpassed the Zacks Consensus Estimate by 1.7%. Revenues of $2.40 billion outpaced the Zacks Consensus Estimate by 0.5%.
DGX has a historical five-year earnings growth rate of 7.4% compared with the industry’s 4.2%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.31%.