Medtronic lowers tariff impact and raises FY26 earnings outlook

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

Medtronic (NYSE:MDT [https://seekingalpha.com/symbol/MDT]) on Tuesday boosted its full-year earnings outlook to account for better-than-expected financials for Q1 fiscal 2025 and a reduced impact from the Trump administration’s newly imposed tariffs. [https://seekingalpha.com/news/4486872-medtronic-plc-non-gaap-eps-of-1_26-beats-by-0_03-revenue-of-8_5b-beats-by-130m]

Concurrently, the company also announced the appointment of two new independent directors and several other strategic changes as activist investor Elliott Investment Management became one of its largest shareholders. [https://seekingalpha.com/news/4486868-medtronic-to-change-board-as-elliott-becomes-major-investor]

Medtronic (NYSE:MDT [https://seekingalpha.com/symbol/MDT]), based in Ireland, reiterated its FY26 outlook for organic revenue growth at approximately 5% but raised the diluted non-GAAP earnings guidance to $5.60 - $5.66 per share, up from $5.50 - $5.60 previously, compared to $5.55 in the consensus.

The revised outlook includes about $185M in tariff-related impact compared to the previous projection of $200M-$350M, Medtronic (NYSE:MDT [https://seekingalpha.com/symbol/MDT]) said.

"We're confident and well-positioned to accelerate our revenue growth in the second half of our fiscal year, as we make meaningful progress on our major growth drivers,” noted CEO Geoff Martha.

"As a result of our Q1 EPS outperformance and improved tariff impact assumption, we are raising our full-year EPS guidance," added CFO Thierry Piéton.

As for quarterly results, Medtronic (NYSE:MDT [https://seekingalpha.com/symbol/MDT]) reported $8.6B in revenue for Q1 with ~8% YoY growth, exceeding the consensus by $130M.

Its Cardiovascular unit added ~$3.3B to the topline with ~9% YoY growth, surpassing the $3.2B projected by analysts, according to Bloomberg data.

MDT’s other segments also outperformed or met expectations, with Medical Surgical and Neuroscience portfolios generating ~$2.0B and $2.4B with ~4% YoY growth each, compared to ~$2.1B and $2.4B in the consensus, respectively.

The Diabetes business, which the company plans to divest in a potential IPO, added $721M to the topline with ~12% YoY growth, exceeding the ~$698.7M projected by analysts.

While MDT’s non-GAAP operating margin slipped 80 bps to 23.6%, falling short of 23.7% in the consensus, its non-GAAP earnings rose ~2% YoY to $1.626, exceeding the Street forecasts by $0.03 per share. [https://seekingalpha.com/pr/20204563-medtronic-reports-first-quarter-fiscal-2026-financial-results#hasComeFromMpArticle=false]

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]
* Medtronic to change board as Elliott becomes major investor [https://seekingalpha.com/news/4486868-medtronic-to-change-board-as-elliott-becomes-major-investor]
* Medtronic plc Non-GAAP EPS of $1.26 beats by $0.03, revenue of $8.5B beats by $130M [https://seekingalpha.com/news/4486872-medtronic-plc-non-gaap-eps-of-1_26-beats-by-0_03-revenue-of-8_5b-beats-by-130m]