Please ensure Javascript is enabled for purposes of website accessibility

Why Medtronic Stock Popped Today

By Rich Smith – Aug 24, 2021 at 3:55PM

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

Medtronic "beat earnings" in Q1 -- and plans to keep on doing that all year long.

What happened

Shares of medical devices manufacturer Medtronic (MDT -3.71%) are up a strong 3.8% in 3:08 p.m. EDT trading Tuesday after reporting a sizable earnings beat this morning.

Expected to report $1.32 per share in pro forma profit on sales of $7.9 billion, Medtronic instead reported $1.41 per share in profit and sales of just under $8 billion.  

Stock up glowing green arrow climbs on a stock screen.

Image source: Getty Images.

So what

Medtronic's revenues surged 23% in the fiscal first quarter of 2022, with sales growing in all four of the company's main business divisions, from diabetes (sales up a modest 1.8% year over year) all the way through medical surgical sales, which boomed up 28.9%. The story on earnings, on the other hand, was a bit more complicated.

On the down side, when calculated according to generally accepted accounting principles (GAAP), earnings didn't quite measure up to the pro forma number that Wall Street fixated on. Actual GAAP profits were only $0.56 per share. On the positive side, however, $0.56 was still 56% better than the $0.36 per share that Medtronic earned in last year's fiscal Q1.  

Now what

Topping off the good news, Medtronic held its revenue guidance for this full fiscal year steady, while raising its guidance for the profits it expects to earn on that revenue. Sales for the year are expected to grow 9% organically (i.e., in addition to any gains from acquisitions). Profits -- to be clear, pro forma profits -- will range from $5.65 per share to $5.75 per share.

Profits anticipated to be at the midpoint of that range mean Medtronic sees itself as on track to beat consensus estimates for full-year fiscal 2022 earnings of $5.69 per share.

Rich Smith 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 Stock Quote
Medtronic
MDT
$76.19 (-3.71%) $-2.94

*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
356%
 
S&P 500 Returns
118%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/28/2022.

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.