Medtronic (MDT) Reports Strong Q4 Performance, Will Separate Diabetes Business

Medtronic plc (NYSE: MDT) has released its financial results for the fourth quarter and fiscal year 2025, marking a robust conclusion to its fiscal year. The company has also announced a dividend increase and provided guidance for the upcoming fiscal year 2026.

Medtronic Reports Better than Expected Results for Fourth-Quarter Fiscal 2025

Medtronic’s fourth-quarter performance for fiscal year 2025 showcased a significant uptick in revenue and earnings, surpassing market expectations. The company reported a quarterly revenue of $8.927 billion, reflecting a 3.9% increase as reported and a 5.4% increase on an organic basis. This performance exceeded the anticipated revenue of $8.81 billion. The company’s non-GAAP diluted earnings per share (EPS) stood at $1.62, surpassing the expected EPS of $1.58, which indicates an 11% increase compared to the previous year.

Key growth areas included the Cardiovascular and Neuroscience portfolios, which saw substantial revenue increases. The Cardiovascular segment, in particular, experienced a 6.6% rise in revenue as reported and a 7.8% increase organically, driven by strong performance in Cardiac Rhythm & Heart Failure and Structural Heart & Aortic divisions. The Neuroscience segment also contributed positively, with a 2.9% revenue increase as reported and a 3.7% organic growth.

Medtronic’s operating profit for the quarter reached $1.436 billion, a 36% increase, while the operating margin improved by 380 basis points. On a non-GAAP basis, the operating profit was $2.486 billion, an 8% increase, with a 90 basis point improvement in the operating margin. These results highlight Medtronic’s ability to convert revenue growth into profitability effectively.

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Medtronic Sets Optimistic Guidance for Fiscal Year 2026, Plans to Spin Off Diabetes Business

Looking forward, Medtronic has set optimistic guidance for fiscal year 2026, projecting organic revenue growth of approximately 5%. The company expects its non-GAAP EPS to grow by about 4%, assuming no significant changes in current tariff policies. This guidance reflects Medtronic’s confidence in its growth drivers and its ability to leverage operational efficiencies to enhance profitability.

Medtronic’s strategic initiatives, such as the planned separation of its Diabetes business into a standalone public company, are expected to streamline operations and focus on core growth areas. The company is also preparing for potential tariff impacts, with contingency plans to mitigate any adverse effects.

Thierry Piéton, Medtronic’s Chief Financial Officer, expressed optimism about the company’s future, citing the momentum in key growth areas and the potential for durable growth and value creation. Medtronic’s commitment to increasing shareholder value is further underscored by its decision to raise the quarterly dividend to $0.71 per share, marking the 48th consecutive year of dividend increases.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.