Will This Crush Medtronic, Inc. (MDT)’s Earnings?

Page 1 of 2

On Tuesday, Medtronic, Inc. (NYSE:MDT) will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they’ll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you’ll be less likely to make an uninformed kneejerk reaction to news that turns out to be exactly the wrong move.

One of the hardest-hit industries from new taxes under Obamacare has been the medical-device business, with a new 2.3% excise tax hitting Medtronic, Inc. (NYSE:MDT) and its device-making peers. Yet the company has taken steps to minimize the impact from Obamacare on its results. Let’s take an early look at what’s been happening with Medtronic, Inc. (NYSE:MDT) over the past quarter and what we’re likely to see in its quarterly report.

Stats on Medtronic

Analyst EPS Estimate $1.03
Change From Year-Ago EPS 4%
Revenue Estimate $4.39 billion
Change From Year-Ago Revenue 2.1%
Earnings Beats in Past 4 Quarters 2

Source: Yahoo! Finance.

Can Medtronic keep its earnings healthy this quarter?
In recent months, analysts have very modestly marked down their views on Medtronic, Inc. (NYSE:MDT)’s earnings, cutting the April quarter’s estimate by a penny per share and the full-year fiscal 2014 projection by $0.02 per share. The stock, though, has advanced a bit, rising 6% since mid-February.

Medtronic, Inc. (NYSE:MDT)

As the leader in spinal and cardiovascular implants, Medtronic is one of the purest plays on medical devices among big companies. Johnson & Johnson (NYSE:JNJ) certainly has a substantial medical-device business, but it’s part of a much bigger health-care conglomerate that spans over-the-counter consumer products, as well as pharmaceuticals. Abbott Laboratories (NYSE:ABT), meanwhile, also has other major businesses, including its generic drug division and its nutritional products. Not being pure plays leaves Johnson & Johnson (NYSE:JNJ) and Abbott Laboratories (NYSE:ABT) less exposed to the industry’s particular challenges, but it also waters down the growth prospects from medical devices.

Yet Medtronic, Inc. (NYSE:MDT) has suffered from overall industry weakness in the cardiovascular market. Rivals St. Jude Medical, Inc. (NYSE:STJ) and Boston Scientific Corporation (NYSE:BSX) both joined Medtronic in posting substantial declines in their cardiac-rhythm management businesses, with St. Jude seeing a double-digit percentage contraction in pacemaker sales in its most recent quarter. Even as Abbott Laboratories (NYSE:ABT) and Johnson & Johnson (NYSE:JNJ) have been able to overcome weakness in their medical-device divisions because of their business diversity, Medtronic has to make do with its area of expertise.

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The World’s Most Famous Circuses

Best Hair Stylists

Most Popular NASCAR Drivers

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!