Medtronic 2026 Q1 Earnings Sustained Profitability as EPS Stabilizes

Medtronic (MDT) reported its fiscal 2026 Q1 earnings on August 19, 2025, showing stable EPS and continued profitability, with revenue growth driven by key segments. The company maintained its earnings outlook, with updated guidance reflecting strong operational leverage and margin improvements.

Revenue
Medtronic’s revenue rose 8.4% year-over-year to $8.58 billion in the first quarter of fiscal 2026. The Cardiovascular segment led the performance with $3.29 billion in revenue, driven by robust demand in Cardiac Ablation Solutions. The Neuroscience segment generated $2.42 billion, supported by spine and neuromodulation products, though it faced some headwinds in Pelvic Health. The Medical Surgical division contributed $2.08 billion, while the Diabetes segment recorded $721 million. Rounding out the report, the "Other" category added $72 million to the total.

Earnings/Net Income
The company reported stable earnings per share (EPS) of $0.81 for the quarter, consistent with the prior year. However, net income slightly declined to $1.05 billion, down 0.2% from $1.05 billion in Q1 2025. Despite this, Medtronic has maintained profitability for 13 consecutive years in the same quarter, underscoring its resilient business model and strong operational discipline.

Price Action
On the stock market, Medtronic’s shares gained 2.35% on the most recent trading day, but declined 2.37% for the week. Month-to-date, the stock edged up 0.32%, reflecting mixed investor sentiment following the earnings release.

Post-Earnings Price Action Review
A strategy of buying Medtronic shares after the earnings report and holding for 30 days yielded a 2.37% return, though it underperformed the broader market, which delivered a 53.10% return. This resulted in an excess loss of 50.73% and a compound annual growth rate (CAGR) of 0.81%. The strategy experienced a maximum drawdown of 0.00%, a Sharpe ratio of 0.04, and a volatility of 21.98%, indicating relatively low risk-adjusted returns.

CEO Commentary
Geoffrey Straub Martha, CEO of Medtronic, highlighted the company’s mid-single-digit revenue growth and EPS performance exceeding expectations. He noted that the Cardiovascular division, particularly its Cardiac Ablation Solutions (CAS), delivered nearly 50% growth driven by the adoption of Pulsed Field Ablation (PFA). The Neuroscience segment posted 3% growth but was impacted by challenges in Pelvic Health. The CEO expressed optimism about the Diabetes segment, citing advancements in Simplera Sync and the upcoming 780G product. Looking ahead, Medtronic is focused on high-growth areas such as CAS, Renal Denervation, and Robotics, with a strategic emphasis on innovation, operational efficiency, and capital allocation.

Guidance
Medtronic is forecasting fiscal year 2026 organic revenue growth of approximately 5%, with Q2 guidance between 4.5% and 5%. Earnings per share guidance was raised to a range of $5.60 to $5.66, up from $5.50 to $5.60, reflecting higher revenue expectations and margin improvements. Thierry Pieton, CFO, noted that the company expects $185 million in tariff impacts for 2026, below prior estimates, with FX benefits now projected at $550 million to $650 million. For Q2, EPS is anticipated to be between $1.30 and $1.32, with a 1% FX benefit and a $18 million tariff drag. The company is also projecting high single-digit EPS growth for fiscal 2027.

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