Medtronic Shares Blow Up on Q1 Earnings

Shares of Dublin-based Medtronic were rallying after the medical device company reported fiscal first quarter earnings that blew the socks off of analysts’ expectations. Revenue was also a lot better than expected for the quarter.

For the quarter ending July, Medtronic reported net income of $1.08 billion, or 79 cents a share.

This is compared to $1.02 billion, or 74 cents, in the year ago quarter. Adjusted earnings, which excluded non-recurring items, was $1.17 for the quarter, a growth of 4%. Analysts had been only expecting $1.11 a share.

Revenue at $7.38 billion may have been a drop of 0.1% but still easily beat the $7.24 billion that analysts were anticipating. The company also reported that revenue for its cardiac and vascular group increased 6.2% to $2.81 billion. Revenue for minimally invasive therapies dropped 17.5% to $2.05 billion, restorative therapies revenue increased 7.7% to $1.95 billion and diabetes group revenue saw a jump of 27.4% to $572 million.

Looking ahead, Medtronic has guided for fiscal 2019 that organic revenue growth will be 4.5% to 5.0%. Previously the company had forecast 4.0% to 4.5%. Medtronic also affirmed its adjusted EPS outlook of $5.10 to $5.15. Analysts are expecting $5.11.

“We are executing against our plan, growing our markets and driving share gains across multiple businesses and geographies,” said Omar Ishrak, Medtronic chairman and chief executive officer.

“Our execution is not only on the top line, but also down the P&L, as we delivered margin expansion through our Enterprise Excellence program while increasing our investment in R&D.”

“We are excited about the growth opportunities in our end markets, and we are bullish about our competitive position,” said Ishrak. “Our pipeline of innovation, invention, and disruption has never been stronger. We are also putting the pieces in place to improve free cash flow conversion, creating additional capital that can be returned to shareholders and reinvested to drive future growth, all with a goal of creating long-term shareholder value.”

Shares have seen a gain of over 11% YTD.

Disclaimer: We have no position in Medtronic (NYSE: MDT) and have not been compensated for this article.