Medtronic Beats on Revenue, Matches Expectations on EPS

Seth Jayson, The Motley Fool
Updated

Medtronic (NYS: MDT) reported earnings on May 22. Here are the numbers you need to know.

The 10-second takeaway
 For the quarter ended April 27 (Q4), Medtronic beat slightly on revenues and met expectations on earnings per share.

Compared to the prior-year quarter, revenue was unchanged and GAAP earnings per share improved significantly.


Gross margins expanded, operating margins dropped, net margins increased.

Revenue details
 Medtronic logged revenue of $4.30 billion. The 22 analysts polled by S&P Capital IQ hoped for revenue of $4.23 billion on the same basis. GAAP reported sales were 0.0% higher than the prior-year quarter's $4.30 billion.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
 EPS came in at $0.99. The 25 earnings estimates compiled by S&P Capital IQ predicted $0.98 per share. GAAP EPS of $0.95 for Q4 were 32% higher than the prior-year quarter's $0.72 per share.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
 For the quarter, gross margin was 75.6%, 30 basis points better than the prior-year quarter. Operating margin was 29.5%, 140 basis points worse than the prior-year quarter. Net margin was 23.1%, 500 basis points better than the prior-year quarter.

Looking ahead
 Next quarter's average estimate for revenue is $4.01 billion. On the bottom line, the average EPS estimate is $0.87.

Next year's average estimate for revenue is $16.52 billion. The average EPS estimate is $3.66.

Investor sentiment
 The stock has a five-star rating (out of five) at Motley Fool CAPS, with 1,727 members out of 1,817 rating the stock outperform, and 91 members rating it underperform. Among 490 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 472 give Medtronic a green thumbs-up, and 18 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Medtronic is outperform, with an average price target of $42.90.

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At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of Medtronic. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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