Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Medtronic (MDT) To Report Q4 Earnings: Will It Top Estimates?

Published 05/20/2019, 09:07 PM
Updated 07/09/2023, 06:31 AM

Medtronic plc (NYSE:MDT) is scheduled to report fourth-quarter and fiscal 2019 results on May 23, before the opening bell.

In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 4.03%. In fact, the bottom-line outpaced estimates in the trailing four quarters, the average being 4.84%.

Let’s see how things are shaping up prior to this announcement.

Key Catalysts

We are upbeat about Medtronic’s successful execution of growth strategies such as therapy innovation, globalization and increase in economic value. Combined with the demographics of an aging population, these positives opened up opportunities for the company, which should get reflected in the fiscal fourth-quarter results.

The therapy innovation space has been seeing multiple developments. Under Cardiac and Vascular Group ("CVG"), new therapies are helping the company gain traction in the rapidly growing MedTech market for left ventricular assist device, transcatheter aortic valve replacement, drug-coated balloons, atrial fibrillation ablation and insertable diagnostics.

Medtronic PLC Price and EPS Surprise

Medtronic PLC Price and EPS Surprise

Medtronic PLC price-eps-surprise | Medtronic PLC Quote

There has been a consistent and gradually stabilizing trend in the global cardiac rhythm and heart failure ("CRHF") market. The company is expected to register strong growth in its ICD (implantable cardioverter defibrillator) and CRT (cardiac resynchronization therapy) product lines within the scope of CRHF, banking on product launch and creation of meaningful markets.

Strong demand for the company's suite of quadripolar cardiac resynchronization therapy-pacemakers has been driving Heart Failure division revenues.

However, in the fourth quarter, this growth can be offset by a decline in sales of left ventricular assist device (LVAD) as a result of market share loss (due to the regulatory approval of Abbott’s competitive product HeartMate 3) and certain unfavorable changes in heart transplant guideline.

In the to-be-reported quarter, Medtronic is expected to have maintained a decent market share in the core pacing banking on the back of continued uptake of Micra Transcatheter Pacing System and the Azure next generation family of pacemakers.

Within Coronary & Structural Heart, the company is expected to gain from solid demand for CoreValve Evolut PRO globally.

Moreover, the Aortic, Peripheral & Venous division is expected to gain from strength in IN.PACT Admiral drug-coated balloon, Valiant Navion thoracic stent graft and solid growth in VenaSeal closure system. Notably, Medtronic has been continuously seeing strong demand for the IN.PACT Admiral drug-coated balloon in Japan since its commercial launch last August.

Overall, the Zacks Consensus Estimate for CVG revenues in the fiscal fourth quarter is pegged at $3.09 billion, indicating 1.6% drop from the year-ago number.

Within Restorative Therapies Group ("RTG"), the company is again projected to register robust progress, particularly in Brain & Pain divisions, despite challenges in the Spine market.

Medtronic’s integrated robotics and navigation platform Mazor X Stealth is expected to drive growth in Neurosurgery business along with creating demand for core spine implants.

The Zacks Consensus Estimate for RTG revenues in the fiscal fourth quarter is pegged at $2.15 billion, implying 7.5% improvement from the last reported quarter.

Within Minimally Invasive Therapies Group ("MITG"), the company is once again expected to deliver robust performance banking on strong sales of portable hemodialysis system as well as the next generation capsule endoscopy product called PillCam Genius.

The Zacks Consensus Estimate for MITG revenues in the fiscal fourth quarter is pegged at $2.24 billion, suggesting 5.6% improvement from the last reported quarter.

Within Diabetes, Medtronic is likely to have sustained U.S. patient demand for its MiniMed 670G hybrid closed loop system. Outside the United States, the company is witnessing strong demand for 640G system. The company is continuing with the launch of MiniMed 670G in some European countries. This should continue to boost international diabetes revenues. However, difficult year-over-year comparisons in U.S. pump sales may dent growth in the to-be-reported quarter.

The Zacks Consensus Estimate for fourth-quarter Diabetes revenues stands at $634 million, indicating an increase of1.7% from the prior-year reported figure.

Here’s What the Quantitative Model Predicts

Our proven Zacks model shows that a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has high chances of beating estimates if it also has a positive Earnings ESP.

Medtronic has an Earnings ESP of +0.07%. It carries a Zacks Rank #3, which increases the predictive power of ESP. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

The Zacks Consensus Estimate for earnings per share of $1.46 indicates an increase of 2.8% from the year-ago period reported figure.

Other Stocks Worth a Look

Here are a few other stocks that have the right combination of elements to post an earnings beat in their upcoming quarterly results.

Canopy Growth Corporation (NYSE:CGC) has an Earnings ESP of +19.91% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

HEXO Corp. (TO:HEXO) has an Earnings ESP of +14.29% and a Zacks Rank #3.

Centene Corporation (NYSE:CNC) has an Earnings ESP of +0.29% and a Zacks Rank #3.

Will you retire a millionaire?

One out of every six people retires a multimillionaire. Get smart tips you can do today to become one of them in a new Special Report, “7 Things You Can Do Now to Retire a Multimillionaire.”

Click to get it free >>



Medtronic PLC (MDT): Free Stock Analysis Report

Centene Corporation (CNC): Free Stock Analysis Report

HEXO Corp. (HEXO): Free Stock Analysis Report

Canopy Growth Corporation (CGC): Free Stock Analysis Report

Original post

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.