Medtronic Ups Fiscal 2027 Forecasts Amid Rising Heart Device Demand
Medtronic raises fiscal 2027 forecasts, driven by robust demand for heart devices and strategic investments.
Medtronic has revised its fiscal 2027 outlook, citing increased demand for its heart devices. The company expects annual organic revenue growth between 7.25% and 7.75%, up from the previous range of 6.75% to 7.25%. The lower end of its adjusted per share profit forecast has been raised to $5.94 from $5.90, while the upper end remains at $6.
Strategic Investments to Drive Growth
Alongside the forecast update, Medtronic announced significant investments in two companies. It will invest $80 million in Pi-Cardia, a heart-valve repair device maker, 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 markets outside the United States.
CEO Geoff Martha highlighted the company's focus on high-growth segments within the medtech industry. "We're prioritizing segments with large patient pools and significant growth potential," he stated during a post-earnings call.
Strong Performance in Cardiovascular Segment
Medtronic's cardiovascular segment reported notable growth, with quarterly sales rising 19.5% to $3.93 billion. This surge was primarily driven by an 88% increase in its pulsed field ablation portfolio, which is used to treat irregular heart rhythms.
The company reported an adjusted quarterly per share profit of $1.45 on revenues of $9.76 billion, surpassing analysts' expectations of $1.39 per share on $9.55 billion in sales, according to data compiled by LSEG.
Tariff Refunds and Market Expansion
Financially, Medtronic benefited from tariff refunds that nearly offset the duties paid during the quarter. However, these refunds have not been factored into future projections. The company's finance chief, Thierry Pieton, emphasized this point during discussions on the financial outlook.
The expansion into emerging markets, particularly in soft tissue robotic surgery, remains a strategic priority for Medtronic. Martha mentioned that the penetration of such technologies in these regions is currently less than 1%, suggesting substantial room for growth.