By Bhanvi Satija
(Reuters) -Medtronic on Tuesday raised its annual profit forecast as the return of non-urgent surgery volumes to pre-pandemic levels boosted demand for its medical devices, sending its shares up 3%.
Medtronic (NYSE:MDT), which makes pacemakers, catheters and other tools used in heart and gastrointestinal surgeries, joins rivals, including Abbott Laboratories (NYSE:ABT), Stryker (NYSE:SYK) and Boston Scientific (NYSE:BSX), on benefiting from a rise in non-urgent surgeries.
CEO Geoff Martha said trends pointed to a recovery in surgical volumes as some procedures returned to stronger than pre-pandemic levels.
"It's been a steady flow versus like a pent-up demand. So I think that's good news for the industry," Martha said.
The Dublin-based medical device maker now expects profit to be between $5.08 per share and $5.16 per share for the fiscal year 2024, compared with the range of $5 to $5.10 per share previously expected.
Medtronic would not be doing any large or medium-scale divestitures after completing the spin off of its patient monitoring and respiratory interventions businesses, which is expected in the first half of fiscal 2025, Martha said.
The company will focus on heart or diabetes devices related tuck-in deals, which would compliment its existing portfolio, Martha added.
For the first quarter, the company's revenue of $7.70 billion came in above estimates of $7.57 billion, according to Refinitiv.
Analysts said the company's better-than-expected quarterly results were also aided by its cost-saving measures, such as job cuts, a revamp of its global supply chain and the ongoing process of offloading some smaller businesses, that offset a hit from rising raw material costs.
The internal changes at Medtronic are starting to "shine through", said Edward Jones analyst John Boylan, adding that these changes will become more apparent in subsequent quarters.
Excluding items, Medtronic reported quarterly profit of $1.20 per share that beat estimates of $1.11 per share.