Medtronic Q3 Results: Revenue Misses Estimates, EPS Beats

Medtronic posts Q3 fiscal 2025 results, with revenue of $8.29B, slightly below expectations. Adjusted EPS of $1.39 exceeds forecasts, though weak inventory levels may impact future sales. Concerns arise over potential stock performance amid macroeconomic uncertainties.

Date: 21-02-2025

AI Rating: 5

Revenue Performance
Medtronic's revenue for Q3 fiscal 2025 stands at $8.29 billion, which marks a 2.5% increase year-over-year but is still slightly below the consensus estimate of $8.33 billion. The disappointment in revenue could induce negative sentiment among investors, possibly leading to a decline in stock prices.

Earnings Per Share (EPS)
On a positive note, adjusted earnings per share are reported at $1.39, exceeding expectations of $1.36. This is a strong indicator of profitability and may provide some support to MDT stock amidst overall market concerns.

Profit Margins
Despite facing challenges, the company demonstrated resilience with an improvement in operating margin from 24.3% in Q2 to 26.2% in Q3. This positive trend in profitability is crucial as it suggests that Medtronic is managing costs effectively while increasing revenue.

Forward Outlook
Medtronic has reiterated its guidance for an organic revenue growth of 4.75% to 5% and adjusted earnings ranging from $5.44 to $5.50 per share for the fiscal year. This aligns closely with analyst expectations, further indicating the company's capacity to meet its financial goals.

Market Performance
The stock's decline of 7% following the results announcement reflects immediate investor reactions to the revenue miss despite the positive EPS figure. The underperformance compared to the S&P 500 index and the extended period of negative returns highlights potential investor disenchantment.

Stocks: MDT