The 10-second takeaway
For the quarter ended Oct. 26 (Q2), Medtronic beat slightly on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped slightly and GAAP earnings per share contracted significantly.
Margins dropped across the board.
Medtronic booked revenue of $4.10 billion. The 22 analysts polled by S&P Capital IQ wanted to see a top line of $4.05 billion on the same basis. GAAP reported sales were 1.8% higher than the prior-year quarter's $4.02 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.88. The 25 earnings estimates compiled by S&P Capital IQ predicted $0.88 per share. GAAP EPS of $0.63 for Q2 were 23% lower than the prior-year quarter's $0.82 per share. (The prior-year quarter included $0.01 per share in earnings from discontinued operations.)
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 75.1%, 100 basis points worse than the prior-year quarter. Operating margin was 28.2%, 30 basis points worse than the prior-year quarter. Net margin was 15.8%, 590 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $4.03 billion. On the bottom line, the average EPS estimate is $0.89.
Next year's average estimate for revenue is $16.52 billion. The average EPS estimate is $3.65.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 1,704 members out of 1,795 rating the stock outperform, and 91 members rating it underperform. Among 488 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 473 give Medtronic a green thumbs-up, and 15 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 $45.20.
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