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Medtronic's (NYSE:MDT) Q4 results handily beat expectations, but the real story was its cautious FY26 outlook, which sent shares lower in early trading Wednesday.
The Ireland-based MedTech giant forecast 4.8%5.1% revenue growth and $5.50$5.60 in adjusted EPS for fiscal 2026below analysts' 4.5% revenue and $5.83 EPS projectionsand warned that U.S./China tariffs may resume at higher rates after the recent 90-day pause.
In Q4, Medtronic delivered $8.9 billion in revenue, up roughly 4% year over year, fueled by a 7% rise in its Cardiovascular portfolio to $3.336 billion versus a $3.28 billion consensus.
Its Neuroscience unit generated $2.62 billion (+3% YoY), and Medical Surgical contributed $2.212 billion (+1%), narrowly topping forecasts. The standout was its diabetes segment, which earned $728 million10% growth and outpacing a $706.6 million consensussetting the stage for a planned spin-off within 18 months.
Adjusted EPS climbed 11% to $1.62, with operating margins improving to 27.8% from 26.9%. For all of FY25, Medtronic posted $33.5 billion in revenue (+4%) and $5.49 in adjusted EPS (+6%), despite a $0.22 FX headwind.
This matters because the mix of a solid topline beat and a conservative outlook underscores how Medtronic is balancing near-term macro riskslike tariffs and order delaysagainst long-term growth drivers such as the diabetes carve-out.
This article first appeared on GuruFocus.