Medtronic posted a strong profit for Q3 of fiscal year 2025, though shares were down as its cardiac ablation product success was offset by weaker sales from its medical-surgical business.
The medtech giant brought in revenue of $8.3bn for the quarter, up 2.5% from the same period in 2024. Revenue growth was below a Bank of America forecast of 4.75%.
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Medtronic performed well on profit, however, with the company reporting adjusted earnings of $1.78bn and $1.39 per share for the period, beating previous estimates. Analysts surveyed by Zacks had expected the company to earn $1.36 per share.
Shares in the NYSE-listed company on 18 February reflected the revenue miss, opening 5% down. Investors also possibly exercised caution in the face of Medtronic’s medical surgical revenue, a unit that includes robot-assisted surgical devices, that saw negative growth.
The business, which includes the surgical and endoscopy (SE) and the acute care and monitoring (ACM) divisions, generated revenue of $2bn – down 1.9% year-over-year. Medtronic stated that sales were affected by pressures and changes in US distributor buying patterns. The company’s blood oxygen management brand Nellcor, for example, saw worse performance as the market for respiratory-related hospitalisations weakened.
Revenue for Medtronic’s Cardiac Ablation Solutions business increased by digits in the low-20s, spurred by the growth of the company’s two pulsed field ablation (PFA) systems PulseSelect and Affera Sphere-9. PulseSelect became the first PFA device available in the US upon its US Food and Drug Administration (FDA) approval in December 2023.
Medtronic CEO Geoff Martha said: “We are starting to see the results from our long-term investments in groundbreaking innovation such as pulsed field ablation to drive growth in some of the most attractive markets in medtech.”
Over the last year, the PFA market has grown to be worth more than $500m, according to analysis by GlobalData. The technology has also helped Boston Scientific, which gained FDA approval for its PFA system in January 2024, to a 172% growth in electrophysiology Q4 sales.
As in previous years, Medtronic’s cardiovascular portfolio brought in the most sales compared to other segments, totalling $3bn. While the PFA segment exhibited high growth, the overall growth of the cardiovascular business was eclipsed by its diabetes portfolio, which grew 8.4% in the quarter. The company’s MiniMed insulin pump increased its customer base and strengthened its continuous glucose monitor (CGM) attachment rates, as per the earnings release.
Medtronic has not changed its fiscal year 2025 outlook on the back of the quarterly results, maintaining organic revenue growth in the range of 4.75% to 5%.
“Looking ahead, our restored earnings power continues. We will accelerate both top and bottom-line growth in Q4, resulting in high-single-digit adjusted EPS growth in the back half of our fiscal year,” said Medtronic’s interim chief financial officer Gary Corona.
