Medtronic plc MDT reported adjusted earnings per share (EPS) of $1.39 for the third quarter fiscal of 2025, up 6.9% from the year-ago quarter’s figure. The figure also beat the Zacks Consensus Estimate by 2.2%. Currency-adjusted EPS for the reported quarter was $1.38.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Without certain one-time adjustments — including amortization, restructuring and associated costs, certain litigation charges and acquisition-related costs, among others — GAAP EPS was $1.01, a 2% improvement from the year-ago quarter’s reported figure.
Worldwide revenues in the reported quarter grossed $8.29 billion, up 2.5% year over year on a reported basis and 4.1% on an organic basis. The top line missed the Zacks Consensus Estimate by 0.4%.
Following the announcement today, MDT shares dipped nearly 1.7% in the premarket trading.
Segmental Analysis of MDT’s Q3 Revenues
The company generates revenues from four major segments: Cardiovascular, Medical Surgical, Neuroscience and Diabetes.
In the fiscal third quarter, Cardiovascular revenues increased 5% organically to $3.04 billion. Within this, Cardiac Rhythm & Heart Failure sales totaled $1.55 billion, up 6.3% year over year organically. Revenues from Structural Heart & Aortic were up 5.2% organically to $874 million. Coronary & Peripheral Vascular revenues were up 1.6% organically to $618 million.
In the Medical Surgical portfolio, worldwide sales totaled $2.07 billion, down 0.4% year over year organically. While Surgical & Endoscopy revenues edged up 0.4% to $1.60 billion, Acute Care & Monitoring revenues fell 2.8% to $476 million.
In Neuroscience, worldwide revenues of $2.46 billion were up 5.2% year over year organically. Cranial & Spinal Technologies sales reached $1.25 billion, up 4.6% year over year organically. Specialty Therapies revenues were $732 million, up 1.9% year over year. Neuromodulation reported 12.9% organic growth to $476 million.
Revenues in the Diabetes group rose 10.4% organically to $694 million. U.S. revenues grew mid-single digits on the continued adoption of the MiniMed 780G automated insulin delivery system, with an increase in the MiniMed 780G installed base and strong CGM (continuous glucose monitoring) attachment rates. International revenues grew in low-double digits on increasing CGM attachment rates as users upgraded to the Simplera Sync sensor.
MDT’s Q3 Margin Performance
Gross margin in the reported quarter expanded 88 basis points (bps) to 66.5% on a 0.1% fall in the cost of revenues.
Research and development expenses fell 2.9% year over year at $675 million. Selling, general and administrative expenses rose 1.7% to $2.72 billion.
Adjusted operating margin expanded 161 bps year over year to 25.6%.
Medtronic Reiterates Fiscal 2025 Outlook
For the full fiscal 2025, Medtronic continues to project organic revenue growth in the range of 4.75-5% (unchanged). 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 3.4-3.8% (earlier 3.4-3.9%).
The Zacks Consensus Estimate for the company’s fiscal 2025 worldwide revenues is pegged at $33.56 billion, implying 3.7% growth from the year-ago reported figure.
Full-year adjusted EPS is expected in the range of $5.44-$5.50 (same as earlier). The Zacks Consensus Estimate for the year’s adjusted earnings is pegged at $5.45 per share.
Our Take on MDT Stock
Medtronic exited the third quarter of fiscal 2025 with an earnings beat and a revenue miss. However, the top line increased on a year-over-year basis. Neuromodulation delivered an above-market performance, driven by Pain Stim growth, including strong U.S. growth propelled by the continued launch of the Inceptiv spinal cord stimulator. The company’s long-term investments in cutting-edge innovation, such as pulsed-field ablation, are beginning to yield results, driving growth in some of the most attractive MedTech markets. Additionally, the expansion of both margins in the quarter is highly encouraging.
MDT’s Zacks Rank & Key Picks
Medtronic currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are ResMed RMD, Cardinal Health CAH and Bio-RadLaboratories BIO.
ResMed reported second-quarter fiscal 2025 adjusted EPS of $2.43, which topped the Zacks Consensus Estimate by 5.6%. Revenues of $1.28 billion exceeded the Zacks Consensus Estimate by 1.6%. RMD carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
RMD has an estimated fiscal 2025 earnings growth rate of 21.9% compared with the industry’s 13.2%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 6.9%.
Cardinal Health, carrying a Zacks Rank #2, posted second-quarter fiscal 2025 adjusted EPS of $1.93, topping the Zacks Consensus Estimate by 10.3%. Revenues of $55.26 billion exceeded the Zacks Consensus Estimate by 0.7%.
CAH has an estimated five-year earnings growth rate of 10.7% compared with the industry’s 9.3%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 9.6%.
Bio-Rad Laboratories, carrying a Zacks Rank #2, posted a third-quarter 2024 adjusted EPS of $2.01, topping the Zacks Consensus Estimate by 57%. Revenues of $649.7 million exceeded the Zacks Consensus Estimate by 2%.
BIO has an earnings yield of 3.3% compared with the industry’s 0.6% yield. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 30.5%.
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