Medtronic PLC (NYSE: MDT) will release its earnings on August 24, 2021, before the market opens, and the estimated earnings per share for the quarter is 1.32. The results are expected to reflect a robust product demand rebound across Medtronic’s primary business segments during the first fiscal quarter as normalcy returned because of reduced cases and mass vaccination. The demand rebound will boost the company’s fiscal Q1 topline.
Increasing product demand to boost revenue in Q1 2022
Since the start of the year, Medtronic has consistently outperformed the markets by launching new products driving share gains in its expanding businesses. The impact of the COVID-19 pandemic on procedures is likely to reflect on market share growth, more so on the Cardiac Rhythm Management segment, which had significant market share gain in the past quarter. The bullish momentum is expected to continue to fiscal Q1 2022 attributable to Crome and Cobalt High Poer devices and Micra leadless pacemaker.
In May 2021, the company noted that it could lose some points of share YoY in the Neurovascular segment because of the latest competitive floe diverters from Terumo and Stryker. Interestingly the company expected shares to stabilize sequentially in Q1 based on the Solitare X 3-millimeter stet retriever launch in the US and the limited pipeline vantage flow diverter launch in some CE mark markets.
Notably, the company's hospital customers have shown recovery signs, with capital equipment purchases gaining momentum. In addition, the use of the company's equipment such as energy consoles, navigation systems, and robotics connected to procedures has grown as hospitals prioritize spending on the equipment. As a result, this will reflect in the quarterly results the company will release.
Medtronics topped analysts' earnings and revenue estimates in Q4
In May, when the company released its Q4 2021 results, it topped estimates with earnings of $1.5 per share and net revenues of $8.19 billion compared to the same period a year before when revenue was $6 billion.
Medtronics indicated that its expected organic growth in Q1 is to be 17% to 18%, with a currency tailwind between $200 million and $250 million. In addition, Medtronics predicted Cardiovascular sales to grow 14% to 15%, neuroscience to increase 25% to 26%, medical Surgical to be up 18%-19%, and Diabetes sales to remain flat YoY.
MDT has a 91% chance of beating earnings estimates
For the current quarter, Stockearning's estimated EPS is $1.32. Over the past 12 quarters, historical EPS performance shows that the company has topped earnings in 11 quarters (91% of times) and only missed once (8% of times). For instance, in Q4 2021 estimated EPS was $1.42, but the actual EPS reported was $1.5.
In the past, following earnings releases, Medtronic stock has been DOWN 25 times in the past 46 quarters. However, since the last earnings release, Medtronic has gained 2.9%. As per Stockearning's algorithm the first day predicted move after the release of results is 2% and 3% on the seventh day.
Historical data shows that next-day trading volume is around 8.9 million shares relative to the average daily volume of 5.24 million shares. Usually, if the trading volume of Medtronic is below 50% in extended hours the day after earnings results, there is a high chance of the stock moving in that direction in regular trading.
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