Medtronic ((MDT)) has held its Q1 earnings call. Read on for the main highlights of the call.
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Medtronic’s recent earnings call painted a picture of robust growth in certain key areas, while also acknowledging challenges in others. The company expressed optimism with an increased EPS guidance, driven by strong performances in Cardiac Ablation Solutions and Diabetes. However, slower growth in MedSurg and Neuroscience, along with ongoing tariff challenges, were noted as areas of concern.
Cardiac Ablation Solutions Growth
Cardiac Ablation Solutions (CAS) experienced remarkable growth, nearly reaching 50%, with the U.S. and Japan markets showing low 70s growth. This surge was primarily fueled by the high demand for Pulsed Field Ablation systems, marking a significant achievement for Medtronic in this segment.
Improvement in Diabetes Segment
The Diabetes segment showed an 8% growth, with international markets contributing an impressive 11% increase. This success was largely attributed to the 780G system and the Simplera Sync sensor, highlighting Medtronic’s strong foothold in diabetes management technology.
Increased EPS Guidance
Medtronic reported an EPS that exceeded previous guidance, prompting an increase in the full-year EPS guidance to a range of $5.60 to $5.66. This adjustment reflects the company’s confidence in its financial performance and strategic initiatives.
Neuroscience Growth
The Neuroscience segment grew by 3%, supported by high single-digit growth in Neurosurgery and Neuromodulation. Despite this growth, the segment faced challenges due to delivery changes in Specialty Therapies, which are expected to improve in the coming quarters.
Strong Performance in Cardiovascular
The Cardiovascular segment reported a 7% growth, driven by strong performances in Cardiac Ablation Solutions and double-digit growth in cardiac surgery, ICDs, and Leadless Pacing. This underscores Medtronic’s leadership in cardiovascular solutions.
Slower Growth in MedSurg
MedSurg’s growth was recorded at 2%, aligning with expectations but falling below the company’s average growth rate. This slower pace highlights the need for strategic focus in this area to enhance performance.
Continued Tariff Headwinds
Tariffs continue to pose a financial challenge for Medtronic, with an anticipated $185 million impact on fiscal 2026. This remains a significant headwind that the company must navigate in the coming years.
Forward-Looking Guidance
Medtronic’s forward-looking guidance remains optimistic, with a consistent mid-single-digit revenue growth aligning with expectations. The company anticipates accelerated growth driven by a robust product pipeline and strategic initiatives. The planned separation of the Diabetes business is expected to be EPS accretive, and new board committees are being formed to focus on growth and operational excellence.
In summary, Medtronic’s earnings call highlighted a strong start to the fiscal year, with significant growth in key areas like Cardiac Ablation Solutions and Diabetes. While challenges remain in MedSurg and Neuroscience, and tariffs continue to impact finances, the company’s increased EPS guidance reflects confidence in its strategic direction and future growth prospects.