Quantcast

Will Medtronic (MDT) Q1 Earnings Show Overall Progress?


Shutterstock photo

Medtronic plc MDT is scheduled to report first-quarter fiscal 2019 results before the opening bell on Aug 21.

Last reported quarter, the company delivered earnings ahead of the Zacks Consensus Estimate by 2.9%. In fact, Medtronic's bottom line outpaced estimates in all the trailing four quarters with an average beat of 3.89%.

Let's see, how things are shaping up prior to this announcement.

Key Catalysts

We look forward to another quarter of solid growth on the company's successful execution of three growth strategies such as therapy innovation, globalization and an increase in Medtronic's economic value. Combined with the demographics of an aging population, these positives have started to open up opportunities for Medtronic, which should further get reflected in the fiscal first quarter.

The space for therapy innovation is filled with multiple developments. Under the Cardiac and Vascular Group (CVG), new therapies are helping the company gain traction in the rapidly growing MedTech markets for left ventricular assist device (LVAD), transcatheter aortic valve replacement (TAVR), drug-coated balloons, atrial fibrillation ablation and insertable diagnostics.

In the to-be-reported quarter, Medtronic is expected to have maintained a decent market share in the core pacing, ICD (implantable cardioverter defibrillator) and CRT (cardiac resynchronization therapy) product lines within the scope of CRHF (cardiac rhythm and heart failure) while creating new meaningful markets to enhance the company's weighted average market growth.

Medtronic PLC Price and EPS Surprise

Medtronic PLC Price and EPS Surprise | Medtronic PLC Quote

The Zacks Consensus Estimate for CVG revenues in the fiscal first quarter is pegged at $2.79 billion, 4.9% higher than the year-ago number of $2.65 billion.

Last reported quarter, Medtronic registered mid single-digit revenue growth in Minimally Invasive Therapies Group (MITG) and Restorative Therapies Group (RTG) plus over 20% growth in diabetes.

In the quarter to be reported, Medtronic is anticipated to have retained its market share in the MITG on the back of strength in Advanced Stapling and Advanced Energy. New product launches are driving growth including Signia powered surgical stapling system, ValleyLab FT10 Energy platform and new iterations of LigaSure vessel sealing instruments.

Medtronic currently remains confident about its ability to grow MITG in mid-single digits over the longer term.

Within RTG, despite ongoing challenges in the Spine market, the company is once again projected to register a robust progress, particularly in Brain & Pain divisions.

Considering its flourish within the brain division,Medtronic is fast capturing the endovascular therapy market for the treatment of ischemic strokes leading to high-teens growth in neurovascular. Notably, in the earlier reported quarter, the company registered low double-digit growth in neurosurgery, indicating strong demand for StealthStation S8 Navigation systems, the Mazor X robotic guidance systems for spine surgeries and Visualase MRI-guided laser ablation system. We expect this bullish trend to continue in the yet-to-be-reported quarter as well.

Within Pain, the company is receiving a positive customer uptake from an array of new offerings in Spinal Cord Stim including Intellis stimulator, Evolve workflow algorithm and Snapshot reporting.

The Zacks Consensus Estimate for RTG revenues in the soon-to-be-reported quarter stands at $1.90 billion, 5.6% above the year-ago figure.

Within Diabetes, Medtronic had a very strong finish to fiscal 2018, driven by U.S. patient demand for MiniMed 670G hybrid closed loop system. Outside the United States, the company is witnessing strong demand for 640G system.

The Zacks Consensus Estimate for Diabetes revenues in the fiscal first quarter stands at $529 million, 17.8% above the prior-year number.

Here's What the Quantitative Model Predicts:

Per the proven Zacks model, a company with a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has good chances of beating estimates if it also has a positive Earnings ESP .

However, Medtronic has a Zacks Rank #4 (Sell), which lowers the predictive power of ESP along with an Earnings ESP of -0.07, which decreases the odds of an earnings surprise. Therefore, this combination makes surprise prediction unlikely this earnings season. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Stocks to Consider

Here are some stocks worth considering from the same space as our proven model shows that these have the right combination of elements to surpass on earnings in the upcoming releases:

The Cooper Companies, Inc. COO has an Earnings ESP of +0.16% and a Zacks Rank #3. You can see  the complete list of today's Zacks #1 Rank stocks here

Catalent, Inc. CTLT has an Earnings ESP of +1.92% and a Zacks Rank of 3.

Myriad Genetics, Inc. MYGN has an Earnings ESP of +2.68% and is a Zacks #3 Ranked player.

Will You Make a Fortune on the Shift to Electric Cars?

Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.

With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

It's not the one you think.

See This Ticker Free >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Medtronic PLC (MDT): Free Stock Analysis Report

Myriad Genetics, Inc. (MYGN): Free Stock Analysis Report

Catalent, Inc. (CTLT): Free Stock Analysis Report

The Cooper Companies, Inc. (COO): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Business , Earnings , Stocks
Referenced Symbols: MDT , MYGN , CTLT , COO



More from Zacks.com

Subscribe






Zacks.com
Contributor:

Zacks.com

Equity Research










Research Brokers before you trade

Want to trade FX?