💉 Medtronic under pressure: Weaker surgical device sales send shares down! 📉
Medtronic $MDT, a leading medical technology company, reported mixed Q3 results . Although earnings per share beat expectations, sales fell slightly short, mainly due to weaker demand for surgical devices. Shares fell more than 7% in response!
📌 Q3 key results:
Earnings per share (EPS): $1.39 (vs. expectations of $1.36)
Revenue: $8.29 billion (vs. expectations of $8.32 billion)
Organic revenue growth: +4.1% year-over-year
Surgical division revenue: $2.07 billion (-1.9%), missed expectations of $2.13 billion
📉 What's behind the decline
Distributors reducing inventory - late in the quarter, some decided to hold less inventory, which impacted sales.
Competitive pressure on surgical products, especially in the surgical staplers and robotic devices segment.
Medtronic expects issues to persist in Q4 2025, increasing uncertainty among investors.
🏥 How each sector is performing
🔬 Cardiovascular Division: +3,7 % Growth due to higher demand for cardiac pacemakers and catheter procedures.
🧠 Neurosciences: +4,4 % Growth, strong demand in the neuromodulation segment.
🚑 Diabetes: +8,4 % Growth, new technologies and sensors help steadily increase sales.
🔻 Surgical Division: -1,9 % Decline, the biggest problem of the whole report.
🌍 Threat of tariffs and geopolitical factors
CEO Geoff Martha warned of the potential impact of U.S. tariff measures , especially if the new tariffs affect production in Mexico, where Medtronic manufactures some of its products. The company does not yet anticipate a major impact, but will monitor the situation closely.
🔮 Outlook for 2025
Forecast adjusted earnings per share: $5.44-$5.50 (vs. expectations of $5.45)
Organic revenue growth in 2025: 4.75-5%
If current exchange rates hold, revenue growth could be 3.4-3.9%
Medtronic Faces pressure due to weak surgical product sales, which may push the stock price down. However, long-term growth in the cardiovascular, neuroscience and diabetes segments suggests that Medtronic has a solid foundation for the future.
Is the current stock decline a buying opportunity? What is your opinion of the company?
I used to follow the company quite a bit and had it on my watchlist, but the performance is lousy, so I haven't bought and probably won't.
Interesting company, but I've been looking at the competition and interestingly enough $SYK is still pretty interesting.
This should only be a short-term decline. The results have not been ideal, but the company still has quite a lot of potential.