The 10-second takeaway
For the quarter ended Jan. 25 (Q3), Medtronic met expectations on revenues and beat slightly on earnings per share.
Compared to the prior-year quarter, revenue grew slightly. Non-GAAP earnings per share grew. GAAP earnings per share grew.
Gross margins contracted, operating margins grew, net margins grew.
Medtronic logged revenue of $4.03 billion. The 21 analysts polled by S&P Capital IQ predicted a top line of $4.03 billion on the same basis. GAAP reported sales were the same as the prior-year quarter's.
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 $0.93. The 20 earnings estimates compiled by S&P Capital IQ anticipated $0.91 per share. Non-GAAP EPS of $0.93 for Q3 were 11% higher than the prior-year quarter's $0.84 per share. (The prior-year quarter included $0.08 per share in earnings from discontinued operations.) GAAP EPS of $0.97 for Q3 were 10% higher than the prior-year quarter's $0.88 per share. (The prior-year quarter included $0.08 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 75.2%, 100 basis points worse than the prior-year quarter. Operating margin was 28.5%, 100 basis points better than the prior-year quarter. Net margin was 24.5%, 60 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $4.39 billion. On the bottom line, the average EPS estimate is $1.03.
Next year's average estimate for revenue is $16.53 billion. The average EPS estimate is $3.68.
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 530 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 517 give Medtronic a green thumbs-up, and 13 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 $46.71.
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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.