Medtronic plc (NYSE:MDT) traded modestly lower in premarket activity on Wednesday after issuing fiscal 2027 earnings guidance that fell short of analyst expectations, overshadowing quarterly results that exceeded Wall Street forecasts.
While the medical technology company delivered stronger-than-expected revenue and earnings for its fiscal fourth quarter, investors focused on a more cautious profit outlook for the year ahead.
Fourth-Quarter Results Come in Ahead of Expectations
For the quarter, Medtronic reported adjusted earnings of $1.55 per share, narrowly surpassing the consensus estimate of $1.54.
Revenue reached $9.8 billion, exceeding analyst expectations of $9.63 billion and representing a 9.9% increase from the $8.9 billion generated during the same period a year earlier.
On an organic basis, quarterly revenue grew 6.6%, reflecting continued momentum across several of the company’s key businesses.
Fiscal 2027 Earnings Forecast Falls Below Consensus
Despite the solid quarterly performance, Medtronic’s guidance for fiscal 2027 failed to meet market expectations.
The company forecast adjusted earnings per share of $5.90 to $6.00 for the year, implying a midpoint of $5.95. That compares with analyst estimates of approximately $6.06 per share.
Management also projected organic revenue growth of 6.75% to 7.25% for fiscal 2027.
The softer earnings outlook weighed on investor sentiment, pushing shares lower in premarket trading.
Management Highlights Strongest Revenue Growth in a Decade
Chief Executive Officer Geoff Martha pointed to the company’s broad-based operational performance and sustained execution across its portfolio.
“Our performance reflects the strongest annual top-line growth Medtronic has delivered in 10 years, powered by disciplined execution across our portfolio and continued operational rigor,” said Geoff Martha, Medtronic chairman and chief executive officer.
Cardiovascular Segment Drives Growth
The Cardiovascular Portfolio delivered the strongest performance among Medtronic’s business units during the quarter.
Revenue from the segment reached $3.8 billion, increasing 13.8% on a reported basis and 10.1% organically.
Growth was fueled by high-teen expansion in Cardiac Rhythm & Heart Failure products, while Cardiac Ablation Solutions posted particularly strong results.
Global Cardiac Ablation Solutions revenue surged 78%, including a 124% increase in the United States, allowing the company to gain an additional eight percentage points of market share domestically.
Other Business Units Post Steady Gains
The Medical Surgical Portfolio generated revenue of $2.4 billion, representing organic growth of 5.1%.
Meanwhile, the Neuroscience business recorded revenue of $2.8 billion and delivered organic growth of 3.0%.
The results demonstrated continued demand across Medtronic’s diversified healthcare technology portfolio.
Full-Year Revenue Climbs as Cash Generation Remains Strong
For fiscal 2026, Medtronic generated total revenue of $36.4 billion, an increase of 8.4% on a reported basis and 5.8% organically.
Adjusted earnings per share for the year reached $5.53, up 0.7% from the prior year.
The company also generated $7.3 billion in operating cash flow and $5.4 billion in free cash flow, underscoring the strength of its financial position.
During the year, Medtronic returned $4.2 billion to shareholders through dividends and other capital return initiatives.
Dividend Increase Extends Long-Term Track Record
Alongside its earnings report, Medtronic announced an increase in its quarterly dividend.
The company raised the first-quarter fiscal 2027 dividend to $0.72 per share, marking its 49th consecutive year of dividend growth.
The latest increase reinforces Medtronic’s long-standing commitment to returning capital to shareholders while continuing to invest in innovation and business expansion.