By Kamal Choudhury and Christy Santhosh
(Reuters) -Medtronic beat second-quarter estimates and raised annual sales growth forecast on Tuesday, driven by strong demand for heart devices, sending its shares up nearly 5%.
Investor expectations for medical device makers have remained high in recent quarters, boosted by robust demand for surgical procedures, particularly among older adults, greater physician adoption and advances in technology.
Sales in Medtronic’s cardiovascular segment jumped 10.8% to $3.44 billion during the quarter, powered by its pulsed field ablation (PFA) portfolio used to treat irregular heart rhythms.
Bernstein analyst Christian Moore said Medtronic’s growth in PFA suggests “sequential share-taking” from Boston Scientific, which is key to the bull thesis for the medical device maker.
Peers Boston Scientific and Edwards Lifesciences also beat quarterly expectations last month, buoyed by resilient demand for heart devices.
Medtronic is very focused on tuck-in M&A deals, particularly in cardiology and neuroscience, with a preference for companies that are “early stage or close to market”, CEO Geoff Martha said on a call with analysts.
Finance chief Thierry Pieton told Reuters the company is “on track” with the separation of its diabetes business and expects the unit, which houses insulin pumps and other wearable devices, to go public in the first half of 2026.
Medtronic’s adjusted earnings per share of $1.36 beat analysts’ estimate of $1.31, according to data compiled by LSEG. Revenue of $8.96 billion was also above expectations of $8.87 billion.
Martha said the company was well positioned for even greater acceleration of revenue growth in the back half of the year and beyond.
The company raised the lower end of fiscal 2026 adjusted profit forecast to $5.62 per share from $5.60, while keeping the top end intact at $5.66. This includes a potential hit of about $185 million from tariffs, unchanged from its prior expectation.
It also increased its full-year organic revenue growth forecast to about 5.5%, from around 5% projected earlier.
(Reporting by Kamal Choudhury and Christy Santhosh in Bengaluru; Editing by Shilpi Majumdar)
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