Medtronic plc MDT reported adjusted earnings per share (EPS) of $1.26 for the second-quarter fiscal 2025, up 0.8% from the year-ago quarter’s figure. The figure also beat the Zacks Consensus Estimate by 1.61%. Currency-adjusted EPS for the reported quarter was $1.35.

Without certain one-time adjustments — including amortization, restructuring and associated costs, certain litigation charges and acquisition-related costs, among others — GAAP EPS was 99 cents, a 45.6% improvement from the year-ago quarter’s reported figure.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Following the announcement, MDT shares dipped nearly 0.5% in the premarket trading today.

Medtronic’s Q2 Revenues

Worldwide revenues in the reported quarter grossed $8.40 billion, up 5.3% year over year on a reported basis and 5% on an organic basis. The top line exceeded the Zacks Consensus Estimate by 1.75%.

Segmental Analysis of MDT’s Q2 Revenues

The company generates revenues from four major segments, namely Cardiovascular, Medical Surgical, Neuroscience and Diabetes.

In the fiscal second quarter, Cardiovascular revenues increased 5.6% organically to $3.10 billion. Within this, Cardiac Rhythm & Heart Failure sales totaled $1.58 billion, up 5% year over year organically. Revenues from Structural Heart & Aortic were up 7.1% organically to $881 million. Coronary & Peripheral Vascular revenues were up 4.8% year over year to $643 million.

In the Medical Surgical portfolio, worldwide sales totaled $2.13 billion, up 0.7% year over year organically. While Surgical & Endoscopy revenues were flat organically to $1.65 billion, Acute Care & Monitoring revenues increased 3.3% to $478 million.

In Neuroscience, worldwide revenues of $2.45 billion were up 6.7% year over year organically. Cranial & Spinal Technologies sales reached $1.23 billion, up 6.4% year over year organically. Specialty Therapies revenues were $737 million, up 3.9% year over year. Neuromodulation reported 12.1% organic growth to $480 million.

Revenues in the Diabetes group rose 11% organically to $686 million. U.S. revenues grew high-single digits on the continued adoption of the MiniMed 780G automated insulin delivery system. International revenues grew low-double digits on increasing CGM attachment rates and the continued roll-out of Simplera Sync sensor.

MDT’s Q2 Margin Performance

Gross margin in the reported quarter contracted 48 basis points (bps) to 64.9% on a 6.7% rise in the cost of revenues.

Research and development expenses fell 0.1% year over year at $697 million. Selling, general and administrative expenses rose 2.6% to $2.76 billion.

Adjusted operating margin expanded 80 bps year over year to 23.8%.

An Updated Guidance From MDT

For fiscal 2025, Medtronic projects organic revenue growth in the range of 4.75-5% (compared with the previous projection of 4.5-5% growth). The organic revenue growth guidance excludes the impact of foreign currency and revenues related to certain businesses reported as Other.

Including Other revenues and the impact of foreign currency exchange, if recent foreign currency exchange rates hold, fiscal 2025 revenue growth on an adjusted basis is likely to be in the range of 3.4-3.9% (earlier 3.4-4.3%).

The Zacks Consensus Estimate for the company’s fiscal 2025 worldwide revenues is pegged at $33.60 billion, implying 3.8% growth from the year-ago reported figure.

Full-year adjusted EPS is now expected in the range of $5.44-$5.50 (compared with the earlier projection of $5.42-$5.50). The Zacks Consensus Estimate for the year’s adjusted earnings is pegged at $5.44 per share.

Our Take on MDT Stock

Medtronic exited the second quarter of fiscal 2025 with both earnings and revenues beat. Both the metrics were up on a year-over-year basis. The company’s robust innovation is driving sustained growth across many franchises, such as TAVR, Diabetes, Spine, and Neuromodulation among others. Within Neuromodulation, both Cranial & Spinal Technologies and Neuromodulation delivered an above-market performance. Expansion of adjusted operating margin in the quarter is encouraging. Meanwhile, the company narrowed its fiscal 2025 outlook for the top and bottom lines.

MDT’s Zacks Rank & Key Picks

Medtronic currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader medical space are Cencora, Inc. COR, Intuitive Surgical ISRG and Globus Medical GMED.

Cencora reported fourth-quarter fiscal 2024 adjusted earnings of $3.34 per share, which topped the Zacks Consensus Estimate by 4%. Revenues of $79.1 billion beat the consensus mark by 1.8%. COR carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

COR’s fiscal 2025 earnings are expected to surge by 7.3%. The company’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 6.97%.

Intuitive Surgical, currently carrying a Zacks Rank #2, posted a third-quarter 2024 EPS of $1.84, topping the Zacks Consensus Estimate by 11.5%. Revenues of $2.04 billion surpassed the Zacks Consensus Estimate by 1.2%.

ISRG has an estimated 2024 earnings growth rate of 20.1% compared with the industry’s 13.8% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 10.96%.

Globus Medical, currently carrying a Zacks Rank #2, reported third-quarter 2024 adjusted earnings of 83 cents per share, which surpassed the Zacks Consensus Estimate by 27.7%. Revenues of $625.7 million topped the Zacks Consensus Estimate by 3.4%.

GMED has an estimated 2024 earnings growth rate of 27.2% compared with the industry’s 15.4% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 17.65%.

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