Medtronic To Exit Unprofitable Ventilator Product Line, Boosts Annual Guidance On Strong Demand

Tuesday, Medtronic Plc MDT reported third-quarter 2024 sales of $8.1 billion, up 4.7% year-on-year (Y/Y) as reported and 4.6% organic, slightly beating the consensus of $7.95 billion.

“Our recent major product approvals – including transformative products in diabetes, cardiac rhythm management, neuromodulation, hypertension, and pulsed-field ablation spaces – increase our confidence in driving reliable growth over the coming quarters and years,” said Geoff Martha, Medtronic chairman, and CEO.

The adjusted EPS of $1.30 exceeds the consensus of $1.26.

Medtronic’s heart device unit sales increased 6.1% Y/Y (+5.1% organic) to $2.93 billion. Spine and neurosurgery product segment sales increased 4.8% Y/Y (+4.3%) to $2.36 billion.

The Medical Surgical Portfolio sales increased 3.9% (+2.9% organic) to $2.15 billion. Diabetes revenue of $640 million increased by 12.3% (+10.2%).

Also Read: Medtronic’s PulseSelect PFA System Gets FDA Nod, Revolutionizing Atrial Fibrillation Treatment in US.

Medtronic has decided to exit its ventilator product line and retain and combine the remaining Patient Monitoring and Respiratory Interventions (PMRI) businesses into one unit called Acute Care and Monitoring (ACM). 

Exiting the increasingly unprofitable ventilator product line and combining the remaining businesses allows for increased investment in ACM with a focus on profitable growth. 

The company said, “Given this increased investment along with an improved competitive landscape, the company has a strong conviction in driving durable category leadership in this newly combined business.”

Guidance: Medtronic raised its fiscal year 2024 sales growth guidance to 4.75%-5% versus the prior guidance of 4.75%.

The medical device maker forecasts fiscal year 2024 adjusted EPS of $5.19-$5.21 versus prior guidance of $5.13-$5.19, compared to the consensus of $5.16.

Price Action: MDT shares are up 2.82% at $86.80 during the premarket session on the last check Tuesday.

PulseSelect PFA System Photo via Company