Please ensure Javascript is enabled for purposes of website accessibility

Medtronic Rises Nearly 3% on Convincing Q1 Beats

By Eric Volkman – Aug 25, 2020 at 2:56PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company's revenue and profitability declines were much narrower than in Q4.

Shares of Medtronic (MDT -0.54%) were on the rise Tuesday, following the medical device maker's release of its Q1 fiscal 2021 results earlier in the day.

For the quarter, which ended July 31, the company booked just over $6.5 billion in revenue, down 13% from the same period of fiscal 2020. Non-GAAP (adjusted) net income fell more precipitously, tumbling 51% to $836 million ($0.62 per share).

A Medtronic glucose monitor

Image source: Medtronic.

Yet analysts tracking the stock were expecting far worse. On average, their estimate for revenue was $5.4 billion, and they were modeling only $0.18 in per-share, adjusted net profit.

Medtronic's declines in revenue and profitability in Q1 were significantly narrower than the steep falls the company suffered in the previous quarter. The main reason in both instances was the coronavirus pandemic, which has ramped up postponements and even cancellations of elective surgeries (resources have to be shifted to the fight against coronavirus and COVID-19, after all, and many patients are avoiding nonemergency hospitalization).

But those patients are coming back, according to the company, and as a result its prospects are improving. "Procedure volumes began to recover around the world, and we're leveraging our pipeline of innovative products to drive share gains in a number of key businesses," said CEO Geoff Martha in the press release announcing earnings.

Similar to its policy with the Q4 results release, Medtronic is not proffering any guidance for future periods. The company again cited the uncertainty caused by the pandemic as the reason for this. 

In midafternoon trading on Tuesday, Medtronic's shares were trading 2.8% higher, well outpacing the gains of the S&P 500 index and many peer healthcare stocks.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Medtronic plc Stock Quote
Medtronic plc
$80.89 (-0.54%) $0.44

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.