Medtronic’s (NYSE:MDT) Decent Q3 Results Kindle Hope
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Medtronic’s (NYSE:MDT) Decent Q3 Results Kindle Hope

Story Highlights

Medtronic delivered better-than-anticipated fiscal third-quarter results. The company also tightened its Fiscal Year 2023 earnings expectations.

Medtronic (NYSE:MDT) reported better-than-expected results for the third quarter of Fiscal Year 2023 (ended January 27, 2023). Buoyed by encouraging performance in the reported quarter, the medical device company raised the lower end of its Fiscal 2023 adjusted earnings guidance.

Quarterly revenues remained flat year-over-year at $7.7 billion but surpassed the consensus estimate of $7.54 billion. Also, the company reported organic revenue growth of 4.1%. This came as a relief to Medtronic, as two straight quarters of declining top-line gave a weak start to the year.

Meanwhile, adjusted earnings per share (EPS) came in at $1.30 per diluted share, down by 4% year-over-year and just ahead of analysts’ forecasts of $1.27. The bottom line was largely impacted by foreign currency translation headwinds and rising inflation.

The company’s performance benefitted from strong demand in the Cardiovascular and Neuroscience portfolios, and improvement in Diabetes markets internationally.  

On the flip side, Medtronic struggled with a slowdown in demand for ventilators in comparison to the last year’s quarter. Also, demand for non-COVID-related devices remained weak during the quarter, due to rising COVID-19 cases in China.

Upbeat Outlook

Medtronic expects Q4 organic revenue growth in the range of 4.5% to 5.0%. Furthermore, the company now expects the bottom line to be between $5.28 to $5.30 compared with the previous guidance of $5.25 to $5.30.

Medtronic chief financial officer Karen Parkhill said, “As we look ahead, we are focused on delivering durable topline growth and significant expense reductions as we navigate through macro headwinds from foreign currency and inflation.”

Is Medtronic a Buy, Sell, or Hold?

Wall Street is sidelined on Medtronic, with a Hold consensus rating based on five Buys, 13 Holds, and one Sell. The average MDT stock price target of $87.41 suggests upside potential of 2.3% from current levels.


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