Medtronic Increases 2027 Forecasts Amid Rising Heart Device Demand
Medtronic raises fiscal 2027 outlook due to strong heart device demand; invests in Pi-Cardia and Cornerstone Robotics.
Medtronic has revised its fiscal 2027 financial forecasts upward, driven by strong demand for its cardiovascular devices. The company now anticipates annual organic revenue growth between 7.25% and 7.75%, up from its previous forecast of 6.75% to 7.25%. The lower end of its adjusted per share profit forecast has also been increased to $5.94 from $5.90, while the upper end remains at $6.
Strategic Investments in Heart Devices and Robotics
In a strategic move to bolster its cardiovascular segment, Medtronic has announced an $80 million investment in Pi-Cardia, a heart-valve repair device manufacturer, with an option to acquire the company for $210 million. Additionally, Medtronic has invested $700 million in Cornerstone Robotics, securing distribution rights for a robotic surgical device in select international markets. CEO Geoff Martha highlighted the synergies between Cornerstone's Sentire device and Medtronic's existing Hugo robotic system, particularly in emerging markets where soft tissue robotic surgery penetration is less than 1%.
Strong Performance in Cardiovascular Segment
The company reported a 19.5% increase in quarterly sales within its cardiovascular segment, totaling $3.93 billion. This growth was largely fueled by an 88% surge in its pulsed field ablation portfolio, which is used to treat irregular heart rhythms. Medtronic's financial performance exceeded expectations, with an adjusted quarterly profit of $1.45 per share on $9.76 billion in revenue, surpassing analyst estimates of $1.39 per share on $9.55 billion in revenue, according to LSEG data.
Financial Management and Outlook
Medtronic's finance chief, Thierry Pieton, noted that the company received tariff refunds that nearly offset the duties paid during the quarter. However, future refunds have not been factored into the company's outlook. CEO Martha emphasized the company's focus on high-growth segments and large patient pools in the medtech industry, stating, "We've had a steady cadence of M&A... prioritizing higher growth segments with confidence they will become big markets."