Medtronic Raises 2027 Forecasts Amid Surge in Heart Device Demand
Medtronic projects higher revenue and profit for fiscal 2027 driven by robust demand for heart devices used in complex procedures.
Medtronic has increased its revenue and profit forecasts for fiscal 2027, citing strong demand for its heart devices utilized in complex cardiovascular procedures. The company now expects annual organic revenue growth between 7.25% and 7.75%, a rise from the previously projected 6.75% to 7.25% range. Additionally, the lower end of its adjusted per share profit forecast has been raised to $5.94, while the upper end remains at $6.
Strategic Investments in Heart and Robotic Devices
In line with its growth strategy, Medtronic announced an $80 million investment in heart-valve repair device maker Pi-Cardia, with an option to acquire it for $210 million. Furthermore, the company has invested $700 million in Cornerstone Robotics, securing distribution rights for a robotic surgical device in select markets outside the United States. Medtronic CEO Geoff Martha highlighted the complementary nature of Cornerstone's Sentire device to Medtronic's existing Hugo device, especially in emerging markets where soft tissue robotic surgery penetration is less than 1%.
Financial Performance and Market Trends
Medtronic's cardiovascular segment reported a 19.5% increase in quarterly sales, reaching $3.93 billion, driven by an 88% growth in its pulsed field ablation portfolio used for treating irregular heart rhythms. The company reported an adjusted quarterly profit of $1.45 per share on $9.76 billion in revenue, surpassing estimates of $1.39 per share on $9.55 billion in sales, according to data compiled by LSEG.
Medtronic's finance chief, Thierry Pieton, noted that the company received tariff refunds covering almost all duties paid during the quarter, though future refunds are not factored into their outlook. The company continues to prioritize higher growth segments within the medtech industry, focusing on areas with large patient pools and significant growth potential.
CEO Geoff Martha emphasized the broad performance across Medtronic's businesses and the increasing contributions from newer growth platforms as key factors in the company's confidence in its revised forecasts. The medtech sector as a whole is experiencing a surge in adoption of new technologies and robust demand for surgeries, positioning Medtronic favorably for future growth.