Medtronic heads into Q1 with softer profit sentiment

[Medtronic headquarters in Silicon Valley]
Sundry Photography/iStock Editorial via Getty Images

Medtronic plc (NYSE:MDT [https://seekingalpha.com/symbol/MDT]) is scheduled to announce Q1 earnings results on Tuesday, August 19th, before market open.

The consensus EPS Estimate is $1.23 [https://seekingalpha.com/symbol/MDT/earnings/estimates] (flat Y/Y) and the consensus revenue estimate is $8.37B (+4.6% Y/Y).

Medtronic has delivered consistent beats, topping EPS estimates [https://seekingalpha.com/symbol/MDT/earnings/eps-surprise-summary?period=quarterly] in each of the last 8 quarters and revenue estimates in 7 of the last 8.

Despite this, sentiment has softened ahead of Q1. Over the past three months, EPS estimates have seen 17 downward revisions [https://seekingalpha.com/symbol/MDT/earnings/revisions?period=quarterly] and no upward changes, while revenue estimates have had 13 upward revisions and 2 cuts.

The medical device firm enters Q1 earnings with solid top-line expectations but a cautious tone on profits. Investors will watch whether Medtronic can sustain top-line momentum despite downward EPS revisions.

“MDT has struggled mightily during the past decade, with returns well-below the average market return. The revenue per share metric has been fairly stagnant, with minimal growth, while the gross profit margin and ROIC have contracted,” Seeking Alpha contributor Dividend Yield Theorist [https://seekingalpha.com/article/4806694-medtronic-growth-challenges-persist] said.

However, the Diabetes segment spin-off aims to refocus Medtronic on higher-margin, growth areas, potentially improving financial metrics over time, the Dividend Yield Theorist noted.

MDT shares have gained over 16% year-to-date, exceeding the broader market's nearly 10% rise.

MORE ON MEDTRONIC PLC

* Medtronic: Diabetes Business Spin-Off Key To Overcoming Stagnation [https://seekingalpha.com/article/4808545-medtronic-diabetes-business-spin-off-key-to-overcoming-stagnation]
* Medtronic: Growth Challenges Persist [https://seekingalpha.com/article/4806694-medtronic-growth-challenges-persist]
* Medtronic: Cash Flow Strength Balanced By Execution Risks [https://seekingalpha.com/article/4798877-medtronic-cash-flow-strength-balanced-by-execution-risks]
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