Analysts expect Medtronic to deliver frank financial answers this week

Burl Gilyard, Star Tribune on

Published in Business News

Medtronic is facing sluggish sales growth, is in the midst of deep cost-cutting and started ongoing global layoffs in April. It's also spinning off businesses with weaker profit margins.

So med-tech analysts will be watching closely Thursday as the world's largest medical device maker reports its fiscal fourth-quarter results.

Wall Street analysts have predicted a consensus revenue estimate of $8.25 billion for the quarter, a 2% increase over the year-ago period. They predict adjusted earnings per share of $1.56, a 2.6% increase, for Medtronic, which is based in Ireland but run from Fridley, Minnesota.

"We believe that (Medtronic) appears to be turning a corner," said Mike Matson of Boston-based Needham & Co. in a research note. He called the company's recent challenges such as supply-chain issues "transitory."

Yet making changes to a company with the size, diversity and complexity of Medtronic is no easy task, said Rick Wise, managing director for the health care sector at St. Louis-based Stifel.

In the long term, Wise said he's optimistic about Medtronic CEO Geoff Martha's leadership.


"You try to move this supertanker; it's challenging," he said. "I think he's taking the company in a positive direction. It's going to take time. Do I wish it could go faster? I sure do."

So it's important, he said, that Medtronic leaders give achievable financial targets to Wall Street.

"They've got to guide and comment about future expectations in a way that they don't disappoint," he said.

While providing some guidance, the company has resisted providing specifics in other areas such as job cuts.


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