The 10-second takeaway
For the quarter ended Jan. 27 (Q3), Medtronic missed estimates on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue contracted slightly and GAAP earnings per share grew slightly.
Margins increased across the board.
Medtronic logged revenue of $3.92 billion. The 23 analysts polled by S&P Capital IQ predicted sales of $4.00 billion on the same basis. GAAP reported sales were 1.1% lower than the prior-year quarter's $3.96 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
Non-GAAP EPS came in at $0.84. The 25 earnings estimates compiled by S&P Capital IQ averaged $0.84 per share on the same basis. GAAP EPS of $0.88 for Q3 were 2.3% higher than the prior-year quarter's $0.86 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 76.2%, 110 basis points better than the prior-year quarter. Operating margin was 28.1%, 70 basis points better than the prior-year quarter. Net margin was 23.9%, 60 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $4.27 billion. On the bottom line, the average EPS estimate is $0.97.
Next year's average estimate for revenue is $16.45 billion. The average EPS estimate is $3.45.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 1,724 members out of 1,814 rating the stock outperform, and 90 members rating it underperform. Among 526 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 514 give Medtronic a green thumbs-up, and 12 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Medtronic is outperform, with an average price target of $41.09.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of Medtronic. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.