TLDR
- Medtronic posted Q3 revenue of $9.02 billion and EPS of $1.36, both exceeding Wall Street estimates
- Shares dropped 2.9% in premarket trading after company maintained fiscal 2026 EPS guidance unchanged
- Cardiovascular division revenue surged 13.8% to $3.46 billion on strong cardiac ablation demand
- Cardiac ablation solutions grew 80% globally and 137% in the U.S. during the quarter
- The 6% organic revenue growth represented Medtronic’s best performance in 10 quarters
Medtronic shares fell 2.9% in premarket trading Tuesday despite crushing third-quarter earnings expectations. The medical device maker reported revenue of $9.02 billion, beating analyst forecasts of $8.91 billion.
Earnings per share came in at $1.36, topping the $1.33 consensus estimate. The company’s 6% organic revenue growth marked its strongest quarterly performance in over two years.
But investors weren’t impressed. Medtronic kept its fiscal 2026 earnings guidance at $5.62 to $5.66 per share. Analysts questioned why the outlook remained unchanged given the strong quarter and foreign exchange tailwinds.
J.P. Morgan analyst Robbie Marcus said the maintained guidance implies weaker fourth-quarter performance. The company benefited from roughly 100 basis points of foreign exchange gains during the period.
Cardiac Devices Power Revenue Growth
The cardiovascular segment stole the show. Sales jumped 13.8% to $3.46 billion, accounting for nearly 40% of total revenue.
Cardiac ablation solutions exploded. The business grew 80% worldwide and 137% domestically. Pulsed field ablation technology drove the gains.
This technology uses electric pulses to destroy heart tissue causing irregular rhythms. Doctors are rapidly adopting the minimally invasive procedure.
Transcatheter aortic valve replacement devices also boosted results. These products treat heart valve problems without open-heart surgery.
Other Business Lines Show Growth
The neuroscience division grew 4.1% to $2.56 billion. The segment produces spinal implants and surgical software. Revenue missed the $2.59 billion estimate.
Medical surgical sales rose 4.9% to $2.17 billion. The diabetes business jumped 14.8% to $796 million.
CEO Geoff Martha said the results demonstrate portfolio strength. “By unlocking new markets and investing in high-growth opportunities, we are accelerating performance across the company,” he stated.
Medtech companies are benefiting from increased healthcare utilization. Health insurers report higher medical loss ratios, indicating more patients are getting procedures done.
Johnson & Johnson reported 7.5% medtech sales growth in its recent quarter. The company’s heart device business showed particular strength.
Medtronic reaffirmed its full-year organic revenue growth target of approximately 5.5%. The guidance factors in a potential $185 million tariff impact.
The company’s strong quarterly performance shows its cardiac portfolio gaining traction. But investors want to see management raise guidance to match the momentum.
