Medtronic beats fourth-quarter estimates for medical device durability

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(Reuters) – Health technology company Medtronic topped Wall Street estimates for quarterly earnings and revenue on Thursday, as a surge in hospital surgeries boosted demand for its medical devices.

Investor expectations for medical device makers’ financial performance have recently increased as demand surges as people, especially older adults, choose to postpone medical procedures due to the Covid-19 pandemic.

Medtronic forecasts fiscal 2025 adjusted earnings per share in the range of $5.40 to $5.50, with the average analyst estimate of $5.45, according to LSEG data.

The Dublin-headquartered company joins medical device makers such as Abbott Laboratories and Boston Scientific who have also benefited from rising demand for non-urgent surgeries.

The company took an adjusted charge of $439 million in the fourth quarter, higher than previously disclosed estimates of $350 million to $425 million, related to its decision to exit its unprofitable ventilator product line and reorganize its respiratory and patient monitoring businesses.

Sales at the company’s diabetes unit, which returned to U.S. growth last quarter, rose 10.9% in the quarter ended April 26.

However, sales at Medtronic’s cardiac devices division, the largest revenue driver, fell 5.2% to $3.13 billion, missing analyst estimates of $3.14 billion.

The second-largest unit by revenue, neuroscience, which makes medical devices and implants used to treat the spine and musculoskeletal system, saw sales rise 5.6%, beating analysts’ expectations.

The health technology company’s total revenue of $8.59 billion is above analysts’ average estimate of $8.44 billion.

For the fourth quarter, the company reported adjusted earnings of $1.46 per share, compared with the estimate of $1.45 per share.

(Reporting by Christy Santhosh and Pratik Jain in Bengaluru; Editing by Shilpi Majumdar)