Medtronic (NYSE:MDT) delivered stronger-than-expected results for the fourth quarter of fiscal 2025 but offered a full-year forecast that came in below Wall Street’s expectations. In a strategic shift, the medical technology company also revealed plans to spin off its Diabetes division.
Shares of Medtronic edged up less than 1% in pre-market trading Wednesday following the earnings announcement.
For the fourth quarter, the company posted earnings per share of $1.62, topping analysts’ consensus of $1.58. Revenue rose 3.6% year-over-year to $8.93 billion, beating the projected $8.82 billion.
Medtronic reported an adjusted operating margin of 27.8%, an improvement over last year’s 26.9%, though it slightly lagged behind the 28.5% forecast by analysts.
In addition, Medtronic announced a dividend increase for the first quarter of fiscal 2026, raising its payout to $0.71 per share, which translates to an annualized dividend of $2.84.
“We had a strong close to our fiscal year, and I’m excited to see the progress we are making as our growth drivers continue to build momentum. Operationally, we translated our accelerating revenue growth into earnings leverage, as we delivered at the upper end of the commitments that we laid out a year ago,” said Geoff Martha, Medtronic’s chairman and CEO.
“The underlying fundamentals of our business are strong, and they are getting stronger. We are now at an inflection point as we accelerate our speed of travel to higher, more profitable growth,” he added.
Despite the strong Q4, the company offered full-year 2026 EPS guidance of $5.50 to $5.60, which falls below the $5.83 expected by analysts. Medtronic also projected organic revenue growth of around 5% for the fiscal year.
As part of a strategic restructuring, Medtronic announced plans to separate its Diabetes business. “The separation is expected to be completed within 18 months through a series of capital markets transactions, with a preferred path of an initial public offering (IPO) and subsequent split-off,” the company said in a statement.