Medtronic expects to return to pre-Covid growth in the current quarter, and MDT stock recovered early from a fiscal third-quarter miss.
During the quarter ended Jan. 28, Medtronic earned $1.37 per share, minus some items, on $7.76 billion in sales. Earnings grew 6% and met the Street's view, according to FactSet. But sales lagged expectations for $7.88 billion. Sales also dipped a fraction on a strict as-reported basis.
The sales miss was largely spread out among Medtronic's segments. Only sales of diabetes products beat expectations, Evercore ISI analyst Vijay Kumar said in a report. Revenue from those products fell 7% to $584 million, but topped MDT stock analysts' estimate by $10 million.
"While investors in general expected a soft print given procedure trends in January, the question was around the degree," he said. "We thought the headline perhaps came in about 100 basis points below expectations."
On the stock market today, MDT stock popped 3.1% to 103.72.
MDT Stock: Sales Come In Light
While diabetes products beat expectations, sales in Medtronic's other three segments came in light by about 150-250 basis points, Kumar said.
Revenue from cardiovascular products — like pacemakers — climbed 1% to $2.75 billion. Sales from the medical surgical portfolio declined 1% to $2.29 billion. And Medtronic's neuroscience devices brought in $2.14 billion, falling 1% on a strict as-reported basis.
But the current-quarter guide offered a more bullish view for MDT stock investors.
The company expects 5.5% organic sales growth, ticking up from 2% organic growth in the January-ended quarter. Medtronic also expects $1.56-$1.58 in adjusted profit per share. Analysts projected $8.46 billion in sales and $1.57 in per-share earnings.
Medtronic shares approached their 50-day line, according to MarketSmith.com.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
