Medtronic plc is gearing up to share its third-quarter fiscal 2024 outcomes on Feb 20, before the markets open.
In the last reported quarter, the company’s earnings exceeded the Zacks Consensus Estimate by 5.9%. It has also surpassed estimates in three of the trailing four quarters, with just one miss, averaging a 4.46% surprise.
Let’s delve into the factors driving the company’s performance and what investors can anticipate amidst market fluctuations.
The Performance Drivers
Similar to previous quarters, Medtronic is likely to have witnessed growth across its diverse businesses and regions, propelled by innovative product launches.
In the Cardiovascular segment, MDT is expected to have excelled once again, driven by the robust global performance of its Micra leadless pacemaker family, latest micro-leadless pacemaker franchise, and the strong market share ascent of ICDs. This should reflect in an anticipated 3.7% revenue growth, pegged at $2.87 billion, according to Zacks Consensus Estimate.
Within the Neuroscience portfolio, the Cranial Spinal technologies business has displayed strong growth recently, while the Specialty Therapies division saw positive contributions from the ENT business and hemorrhagic stroke flow diversion products, potentially lifting revenues for the fiscal third quarter.
In the MedSurg portfolios, the rollout of the Hugo robotic systems in various markets and the FDA approval for the U.S. Hernia indication pivotal trial for Hugo are likely to have driven revenues. Furthermore, the company’s agreement to expand its collaboration with Cosmo Intelligent Medical Devices, aimed at advancements in GI GeniusTM’s intelligent endoscopy module, are anticipated to have bolstered the top line in the fiscal third quarter.
Diabetes Momentum
In the Diabetes segment, international markets have been a significant growth driver, with strong adoption of MiniMed 780G insulin pump and Guardian 4 sensor. The Zacks Consensus Estimate for the segment’s revenues is at $598 million for the fiscal third quarter, indicating potential growth of 4.9% from the year-ago reported figure.
Earnings Expectations
The Zacks Consensus Estimate for total revenues of $7.95 billion represents a 2.9% rise from the prior-year reported number. Meanwhile, the consensus mark for earnings is pegged at $1.26 per share, reflecting a 3.1% decline from the year-ago reported figure.
Earnings Prediction
Our predictive model does not definitively foresee an earnings beat for Medtronic this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) typically serves as a positive indicator for an earnings beat, however, Medtronic has an Earnings ESP of 0.00% and a Zacks Rank #3.
Potential Prospects
While Medtronic’s performance remains under scrutiny, investors can explore other medical stocks with a promising combination of factors for a potential earnings beat. Among them is GoodRx with an Earnings ESP of +15.91% and a Zacks Rank #2, set to announce its fourth-quarter 2023 results on Feb 29.
GDRX has an expected earnings growth rate of 14.3% compared with S&P 500’s 4.9%. Its earnings have surpassed estimates in three of the last four quarters, with an average beat of 18.3%.
