Medtronic (MDT) shares climbed sharply in early trading Wednesday, rising 5.1% to $77.52, after the medical-device maker reported fiscal fourth-quarter revenue and adjusted profit that exceeded Wall Street expectations. The rally, however, faced headwinds from a fiscal 2027 profit forecast that fell short of analyst estimates and a projected $250 million hit from tariffs.
Strong Heart-Device Performance
The standout performer was the cardiac ablation business, which saw global revenue surge 78% and U.S. revenue jump 124%. This segment, which uses devices to destroy small areas of heart tissue causing abnormal rhythms, drove overall cardiovascular revenue up 13.8% to $3.797 billion. Total revenue for the quarter ended April 24 rose 9.9% to $9.807 billion, beating the $9.63 billion consensus, according to LSEG data. Adjusted earnings per share came in at $1.55, just above the $1.54 estimate.
CEO Highlights Growth Momentum
CEO Geoff Martha noted that the year marked Medtronic's strongest annual top-line growth in a decade, citing gains in cardiac rhythm management, surgical technologies, and newer platforms like Affera, Symplicity, and Hugo. CFO Thierry Piéton said the company is entering fiscal 2027 with strong momentum and a resilient operating foundation.
Analyst Optimism and Competitive Landscape
RBC Capital Markets analyst Shagun Singh told Reuters she was encouraged by Medtronic's growth initiatives, particularly in cardiac ablation and electrophysiology, and noted that Medtronic's renal denervation treatment for high blood pressure remains underappreciated. The company also announced investments in Beluga Medical and CardioACC, two firms developing intracardiac echocardiography (ICE) catheters, which provide real-time heart imaging during electrophysiology procedures. Competition remains intense, with Boston Scientific and Abbott both active in pulsed-field ablation, a newer heart-rhythm treatment. Medtronic, Boston Scientific, and Abbott all presented positive pulsed-field ablation data at the Heart Rhythm Society meeting in April, keeping pressure on this fast-growing field.
Surgical Robotics Milestone
Medtronic also filed 510(k) submissions with the FDA to expand its Hugo robotic-assisted surgery system into general and gynecologic surgery, adding to its existing clearance for urologic procedures. This move brings Medtronic closer to competing with Intuitive Surgical's da Vinci robot, which saw its shares dip 0.2% on the day. The Hugo system, which received FDA clearance in late 2025, marks the first significant new competitor for Intuitive in robotic-assisted surgery.
2027 Outlook and Tariff Concerns
Despite the strong quarter, Medtronic's fiscal 2027 adjusted earnings forecast of $5.90 to $6.00 per share was below the $6.06 consensus. The company also warned that tariffs would cut about $250 million from fiscal 2027 results, including $75 million in the first quarter. The outlook includes the diabetes business, now a public company called MiniMed, and Medtronic said it would revise guidance if that separation is completed before year-end.
Market Reaction and Risks
The downside risks include potential cooling of cardiac ablation momentum, delays in FDA timing for Hugo, or tariffs hitting margins harder than expected. For now, investors focused on the strong quarterly performance, pushing shares higher, but the 2027 profit warning and tariff impact remain key concerns. The stock's move suggests that near-term growth outweighed longer-term uncertainties, though the debate over 2027's bill is far from settled.
