A month has gone by since the last earnings report for Medtronic (MDT Quick QuoteMDT - Free Report) . Shares have added about 0.7% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Medtronic due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Medtronic Q1 Earnings, Revenues Top Estimates, Margins Down

Medtronic reported adjusted earnings per share 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 earnings per share 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 earnings per share 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.

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 earnings per share 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.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

VGM Scores

Currently, Medtronic has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Medtronic has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Medtronic is part of the Zacks Medical - Products industry. Over the past month, Haemonetics (HAE Quick QuoteHAE - Free Report) , a stock from the same industry, has gained 0.3%. The company reported its results for the quarter ended June 2024 more than a month ago.

Haemonetics reported revenues of $336.17 million in the last reported quarter, representing a year-over-year change of +8%. EPS of $1.02 for the same period compares with $1.05 a year ago.

For the current quarter, Haemonetics is expected to post earnings of $1.09 per share, indicating a change of +10.1% from the year-ago quarter. The Zacks Consensus Estimate has changed -1.2% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Haemonetics. Also, the stock has a VGM Score of F.