Medtronic Raises 2027 Forecasts Amid Surge in Heart Device Demand
Medtronic boosts its fiscal 2027 outlook, driven by strong demand for heart devices and strategic investments.
Medtronic has revised its fiscal 2027 forecasts upward, citing robust demand for its heart devices used in advanced cardiovascular procedures. The company now anticipates annual organic revenue growth between 7.25% and 7.75%, up from its previous projection of 6.75% to 7.25%.
On a post-earnings call, CEO Geoff Martha emphasized the widespread performance across Medtronic's business units and the growing impact of new growth platforms. The company adjusted the lower end of its fiscal 2027 adjusted per share profit forecast to $5.94 from $5.90, maintaining the upper limit at $6.
Strategic Investments in Heart Device Makers
Medtronic has announced an $80 million investment in heart-valve repair device maker Pi-Cardia, with an option to acquire the company for $210 million. Additionally, Medtronic has invested $700 million in Cornerstone Robotics, securing rights to distribute a new robotic surgical device in select markets outside the United States. Martha noted that the penetration of soft tissue robotic surgery remains below 1% in emerging markets, indicating significant growth potential.
"We've maintained a steady pace of mergers and acquisitions, focusing on high-growth segments of medtech with large patient pools," Martha stated, highlighting the strategic direction of the company's investments.
Cardiovascular Segment Growth
Medtronic's cardiovascular segment reported a 19.5% increase in quarterly sales, reaching $3.93 billion. A key driver of this growth was the company's pulsed field ablation portfolio, which saw an 88% surge. This technology is used to address irregular heart rhythms, contributing significantly to the segment's performance.
Overall, Medtronic posted an adjusted quarterly per share profit of $1.45 on revenues of $9.76 billion, surpassing analyst expectations of $1.39 per share on $9.55 billion in sales, according to LSEG-compiled data.
Financial Adjustments and Outlook
Medtronic's Chief Financial Officer Thierry Pieton noted that the company received tariff refunds nearly covering the duties paid during the quarter. However, future refunds have not been factored into the company's financial outlook.
The strategic investments and financial adjustments underscore Medtronic's commitment to expanding its presence in the medtech sector, particularly in heart devices and robotic surgery, as it positions itself for sustained growth.