Medtronic blamed China lockdowns and supply chain constraints for its wide quarterly miss Thursday, leading MDT stock to plunge.
Evercore ISI analyst Vijay Kumar noted revenue grew just 1.4% organically to $8.09 billion and was 4% below analyst projections. Medtronic had called for 5.5% organic sales growth. Further, adjusted profit lagged expectations at $1.52 a share, though climbed 2 cents year over year.
"While we have seen consistent pressures due to supply chain, this is the first time we are seeing a sizable revenue miss in large-cap medtech," Kumar said in a note to clients. "We would be curious to know what caused it and whether fiscal year 2023 has any impact."
On today's stock market, MDT stock dropped 5.8% to 99.44.
MDT Stock: Cardiovascular Sales Pop
Overall, fiscal fourth-quarter sales fell 1.2% on a strict as-reported basis.
Medtronic noted steep drops in sales of its diabetes management devices and medical surgical business. Diabetes sales tumbled 7.7% to $597 million, partially impacted by a drop in the low 20 percent range in the U.S. "given the absence of new product approvals." Surgical sales tumbled 4.6% to $2.23 billion.
Meanwhile, sales of neuroscience products ticked up just 0.2% to $2.3 billion. Medtronic's biggest business, however, is its cardiovascular products. Sales in that division added 1.8% to $2.96 billion.
For the year, Medtronic expects 4%-5% organic sales growth and adjusted earnings of $5.53-$5.65 per share. MDT stock analysts called for $32.02 billion in sales, up just 1.1% on a strict as-reported basis. Medtronic's earnings call completely missed analysts' forecast for $5.66.
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