Medtronic plc MDT posted fourth-quarter fiscal 2026 adjusted earnings of $1.55 per share, down 4.3% from the year-ago quarter but above the Zacks Consensus Estimate by 0.58%.
For full-year fiscal 2026, adjusted EPS was $5.53, up 0.7% year over year. The figure missed the Zacks Consensus Estimate by 0.2%.
Revenue rose 9.9% year over year to $9.81 billion and beat the consensus mark by 1.48%. The upside came as procedure-driven demand stayed firm across key franchises. Cardiac Ablation Solutions revenues surged 78% globally, including 124% growth in the United States, while multiple portfolios delivered healthy gains.
Full-year worldwide revenues totaled $36.4 billion, up 8.4% year over year. The top line marginally surpassed the Zacks Consensus Estimate by 0.6%.
Following the announcement today, MDT shares rose nearly 2% in the pre-market trading.
MDT’s Portfolio Mix Banks on Cardiovascular
Cardiovascular generated $3.80 billion in the quarter, underscoring the importance of the company’s largest portfolio to overall momentum. Neuroscience contributed $2.75 billion, and Medical Surgical added $2.39 billion, reflecting steady demand across hospital-based therapy areas.
Medtronic PLC Price, Consensus and EPS Surprise
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Diabetes produced $837 million of revenues and remained a meaningful growth lever alongside the broader portfolios. The mix shows Medtronic’s exposure to both large, recurring procedural categories and faster-moving product cycles in areas like diabetes management.
MDT’s Geographic Split Favors International Growth
U.S. revenues increased 7.1% year over year to $4.87 billion, supported by gains across major portfolios and continued procedure volume resilience.
International revenues advanced 12.8% to $4.94 billion. The overseas outperformance was broad-based and included a notable lift in Diabetes internationally, reinforcing how global scale can amplify Medtronic’s reported results when demand is healthy.
Medtronic’s Adjusted Margins Appear Mixed
On an adjusted basis, Medtronic posted a gross margin of 65.4% in fourth-quarter fiscal 2026, up 30 basis points year over year, reflecting a modest improvement in profitability at the product level.
However, operating leverage moved the other way. The adjusted operating margin fell to 25.5%, down 230 basis points from the prior-year quarter, as the company absorbed notable headwinds, including margin impacts tied to the MiniMed Blackstone payment and tariffs.
Medtronic’s Cash Generation Supports Returns and Investment
Operating cash flow totaled $7.33 billion in fiscal 2026, providing the financial flexibility to fund both portfolio investment and shareholder distributions. Free cash flow was $5.43 billion for the year, equal to 76% free cash flow conversion from adjusted net earnings.
Medtronic also returned $4.2 billion to shareholders in fiscal 2026 and ended the year with $9.2 billion in cash and investments.
Medtronic’s FY27 Guidance and Shareholder Returns
MDT guided for fiscal 2027 organic revenue growth of 6.75% to 7.25% and adjusted earnings of $5.90 to $6.00 per share. The outlook reflects the benefits of a 53rd week, additional M&A and a full-year contribution from the Diabetes business while also considering tariffs, interest and tax expense. The Zacks Consensus Estimate expects fiscal 2027 revenues of $38.39 billion, up 6.1% from the fiscal 2026 levels, while EPS is expected to rise 9.7% to $6.08.
Medtronic also increased its quarterly dividend to $0.72 per share, implying an annual rate of $2.88 and marking its 49th consecutive year of dividend increases.
Our Take on MDT
Medtronic exited the fourth quarter of fiscal 2026 with earnings and revenue beat.The company highlighted share gains and product traction in several cardiovascular franchises. The company cited continued strength in Cardiac Pacing Therapies and Defibrillation Solutions, including momentum in Micra and the U.S. launch of OmniaSecure. However, the contraction of the adjusted operating margin in the quarter is discouraging.
On the innovation front, management pointed to a U.S. FDA submission for Hugo robotic-assisted surgery in general surgery and gynecology, along with FDA clearance for ProGrip Advanced and regulatory wins for the Stealth AXiS Surgical System. Medtronic also executed a tuck-in activity, including the completed CathWorks acquisition in Coronary and Renal Denervation, and plans to acquire Scientia Vascular and SPR Therapeutics, complemented by select venture investments.
MDT’s Zacks Rank & Key Picks
Medtronic currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the broader medical space are Align Technology ALGN. Intuitive Surgical ISRG and Integra LifeSciences IART.
Align Technology, currently sporting a Zacks Rank #1 (Strong Buy), reported a first-quarter 2026 adjusted EPS of $2.58, which surpassed the Zacks Consensus Estimate by 14.41%. Revenues of $1.04 billion beat the Zacks Consensus Estimate by 1.8%. You can see the complete list of today’s Zacks #1 Rank stocks here.
ALGN has an estimated long-term earnings growth rate of 10.3% compared with the industry’s 9.5% growth. The company beat earnings estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 7.8%.
Intuitive Surgical,carrying a Zacks Rank #2 (Buy) at present, posted a first-quarter 2026 adjusted EPS of $2.50, exceeding the Zacks Consensus Estimate by 20.2%. Revenues of $2.77 billion topped the Zacks Consensus Estimate by 6.2%.
ISRG has a long-term earnings growth rate of 14.6% compared with the industry’s 12.6% growth. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 16.82%.
Integra LifeSciences,carrying a Zacks Rank #2 at present, posted a first-quarter 2026 adjusted EPS of 54 cents, exceeding the Zacks Consensus Estimate by 32.78%. Revenues of $391.9 million outperformed the Zacks Consensus Estimate by 2.7%.
IART has an earnings yield of 15.4% against the industry’s negative 1.9% yield. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 16.8%.
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This article originally published on Zacks Investment Research (zacks.com).