MDT Stock Tumbles As Covid Lockdowns, Supply Chain Hammer Sales, Profit

Medtronic (MDT) blamed China lockdowns and supply chain constraints for its wide quarterly miss Thursday, leading MDT stock to plunge.


Evercore ISI analyst Vijay Kumar noted revenue grew just 1.4% organically to $8.09 billion and was 4% below analyst projections. Medtronic had called for 5.5% organic sales growth. Further, adjusted profit lagged expectations at $1.52 a share, though climbed 2 cents year over year.

“While we have seen consistent pressures due to supply chain, this is the first time we are seeing a sizable revenue miss in large-cap medtech,” Kumar said in a note to clients. “We would be curious to know what caused it and whether fiscal year 2023 has any impact.”

On today’s stock market, MDT stock dropped 5.8% to 99.44.

MDT Stock: Cardiovascular Sales Pop

Overall, fiscal fourth-quarter sales fell 1.2% on a strict as-reported basis.

Medtronic noted steep drops in sales of its diabetes management devices and medical surgical business. Diabetes sales tumbled 7.7% to $597 million, partially impacted by a drop in the low 20 percent range in the U.S. “given the absence of new product approvals.” Surgical sales tumbled 4.6% to $2.23 billion.

Meanwhile, sales of neuroscience products ticked up just 0.2% to $2.3 billion. Medtronic’s biggest business, however, is its cardiovascular products. Sales in that division added 1.8% to $2.96 billion.

For the year, Medtronic expects 4%-5% organic sales growth and adjusted earnings of $5.53-$5.65 per share. MDT stock analysts called for $32.02 billion in sales, up just 1.1% on a strict as-reported basis. Medtronic’s earnings call completely missed analysts’ forecast for $5.66.

Follow Allison Gatlin on Twitter at @IBD_AGatlin.


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