The 10-second takeaway
For the quarter ended April 26 (Q4), Medtronic beat slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew. Non-GAAP earnings per share grew. GAAP earnings per share didn't change.
Gross margins dropped, operating margins grew, net margins dropped.
Medtronic notched revenue of $4.46 billion. The 21 analysts polled by S&P Capital IQ looked for revenue of $4.38 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 $1.10. The 24 earnings estimates compiled by S&P Capital IQ anticipated $1.03 per share. Non-GAAP EPS of $1.10 for Q4 were 11% higher than the prior-year quarter's $0.99 per share. (The prior-year quarter included $0.10 per share in earnings from discontinued operations.) GAAP EPS of $0.95 were the same as the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 74.6%, 100 basis points worse than the prior-year quarter. Operating margin was 30.7%, 120 basis points better than the prior-year quarter. Net margin was 21.7%, 140 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $4.12 billion. On the bottom line, the average EPS estimate is $0.90.
Next year's average estimate for revenue is $16.97 billion. The average EPS estimate is $3.84.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 1,709 members out of 1,802 rating the stock outperform, and 93 members rating it underperform. Among 502 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 488 give Medtronic a green thumbs-up, and 14 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 $49.78.
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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.