Why did MDT's Q3 2025 earnings fall short?

Medtronic's Q3 2025 earnings fell short primarily due to challenges in the Surgical business and shifts in U.S. distributor buying patterns, despite strong performances in other segments:

1. **Surgical Business Challenges**: The Medical Surgical portfolio experienced a change in U.S. distributor buying patterns, impacting surgical performance by a couple of hundred basis points. This shift in purchasing patterns likely led to a decline in revenue from the Surgical business.
2. **Currency Impact**: The company has faced headwinds from currency impacts, which have affected financial performance. Although Medtronic has been making efforts to mitigate this risk, the impact of currency fluctuations likely contributed to the shortfall in earnings.
3. **Cost Escalation and Inflationary Pressures**: Rising costs and expenses, including raw material and labor costs, have been a challenge for Medtronic. These cost escalation pressures have impacted profitability, particularly in the third quarter.

In summary, Medtronic's Q3 2025 earnings fell short due to challenges in the Surgical business, shifts in U.S. distributor buying patterns, currency impact, and cost escalation pressures. Despite these challenges, the company's strong performances in other segments, such as Cardiac Ablation Solutions and Neuromodulation, suggest that Medtronic remains well-positioned for future growth.