Medtronic's Mixed Q4 Earnings Report | The Motley Fool (2024)

Q4's results exhibited consistent organic revenue growth but it got hit by currency fluctuations and strategic divestitures.

Medical technology specialist Medtronic (MDT 1.12%) released fourth-quarter and full-year data for fiscal 2024 on Thursday, May 23, that painted a nuanced financial picture.

The company reported $8.59 billion in Q4 revenue which was up less than 1% year over year, yet it rose a robust 5.4% growth on an organic basis (growth not attributable to mergers and acquisitions). Medtronic's business currently faces hurdles due to foreign currency fluctuations and strategic divestitures. For the full fiscal year, revenue was up 3.6% (5.2% organically).

MetricQ4 Fiscal 2024Q4 Fiscal 2023Change (YOY)Organic Change (YOY)
Revenue$8.59 billion$8.54 billion0.5%5.4%
GAAP EPS (diluted)$0.49$0.88(44%)N/A
Adjusted EPS (diluted)$1.46$1.57(7%)N/A
MetricFiscal 2024Fiscal 2023ChangeOrganic Change
Revenue$32.4 billion$31.2 billion3.6%5.2%
GAAP EPS (diluted)$2.76$2.82(2.1%)N/A
Adjusted EPS (diluted)$5.20$5.29(2%)N/A

Source: Medtronic.

Medtronic at a glance

Medtronic specializes in medical technologies with a broad portfolio that includes cardiac and vascular therapies, minimally invasive surgery products, restorative therapies, and diabetes management solutions. It focuses on regulatory compliance, global market expansion, and driving forward with an array of innovative new products and improved technologies.

Key focus areas right now include efficient product portfolio management, robust cost management, and competitive pricing strategies. The ability to operate in over 150 countries allows it to tap into diverse markets, ensuring a steady growth trajectory.

Notable Q4 and full-year financial and product developments

The Cardiovascular segment recorded a mixed quarter: Q4 revenue was down 5.2% as reported but grew 4% organically. Full-year revenue for this segment reached $11.8 billion, up 2.7%. That growth was driven mainly by new cardiac pacing therapies and the Evolut FX transcatheter aortic valve replacement system.

In its Neuroscience portfolio, Medtronic grew revenue 5.6% in Q4 (with a notable 6.5% organic growth). This result was bolstered by high adoption of its AiBLE ecosystem technologies and newer neurostimulator products. For the full year, revenue in this segment rose 5% to $9.4 billion.

The Medical Surgical portfolio posted $2.2 billion in Q4 revenue, a 3.5% increase driven by new hernia and wound management products. Full-year revenue of $8.4 billion reflects a 5.4% rise, showcasing the segment's solid performance and growing acceptance of new technologies.

The Diabetes segment's revenue rose a substantial 10.9% in Q4, fueled primarily by U.S. adoption of the MiniMed™ 780G system. For the full year, this segment's revenue rose 10%, reaching $2.49 billion, indicating robust growth potential from recent FDA submissions and approvals for new minimally invasive devices.

Underlying causes and market influence

The bottom-line drops in Q4 performance were largely influenced by strategic market changes and one-time events. The company exited the ventilator product line, influencing an organic revenue decrease (but boosting operational efficiencies). Additionally, currency fluctuations negatively impacted revenue by approximately $72 million, showcasing the fragility of global operations amid financial market volatility.

Medtronic's decision to streamline its product portfolio influenced reported revenue figures, with business separations and product exits accounting for $57 million in lost current-year revenues and affecting organic comparisons. Nevertheless, robust organic growth of 5.4% overshadowed these impediments.

Dividends and shareholder returns

Medtronic announced a quarterly dividend of $0.70 per share, up $0.01 from the prior quarter. The new dividend rate amounts to an annualized $2.80 per share. This marks the 47th consecutive year of dividend increases, reflecting confidence in stable cash flow and ongoing product innovation.

Looking forward to fiscal 2025

For fiscal year 2025 (which began April 27, 2024), Medtronic forecasts organic revenue growth of 4% to 5%, excluding foreign currency impacts. Annual adjusted EPS is projected to land between $5.40 and $5.50, indicating confidence in overcoming current market fluctuations. This guidance is a slight improvement compared to fiscal 24, suggesting expected financial health and robust market position.

Investors should monitor ongoing R&D projects, especially new product trials and submissions to the Food and Drug Administration (FDA). Key areas to watch include further advancements in diabetes management devices and regulatory decisions impacting newly launched cardiac and neuroscience products. Balancing growth initiatives while mitigating currency impacts will be essential for sustained performance.

JesterAI is a Foolish AI, based on a variety of Large Language Models (LLMs) and proprietary Motley Fool systems. All articles published by JesterAI are reviewed by our editorial team, and The Motley Fool takes ultimate responsibility for the content of this article. JesterAI cannot own stocks and so it has no positions in any stocks mentioned. The Motley Fool recommends Medtronic and recommends the following options: long January 2026 $75 calls on Medtronic and short January 2026 $85 calls on Medtronic. The Motley Fool has a disclosure policy.

Medtronic's Mixed Q4 Earnings Report | The Motley Fool (2024)

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