Earnings Preview: Medtronics

| About: Medtronic plc (MDT)

Medtronic (NYSE:MDT) is expected to report Q1 earnings before the bell Tuesday, Aug. 19, with a conference call scheduled for 8:00 am ET.

Guidance

Analysts are looking for a profit of 69c on revenue of $3.67B. The consensus is 67c to 72c for EPS, and revenue of $3.58B to $3.73B, according to First Call. In its Q4 earnings release Medtronic reported EPS 78c compared to consensus of 73c and revenue of $3.28B compared to consensus of $3.72B.

Analyst Views

Positive influences on this earnings period include possible positive impacts from the Endeavor stent and accretion from the Kyphon acquisition. Also, market penetration for Medtronic products overseas and its Diabetes business might provide a lift to this quarter's results. Risks to earnings for Medtronic continue to be the slowing domestic ICD market.

On August 18, Leerink Swann said it anticipates in-line Q1 2009 results. The firm believes an attractive entry point has been created from depressed valuation. Leerink says as management executes its near term and long term financial goals over the next 9 to 12 months, given positive operating leverage, sustainable double-digit EPS growth and an improving sales growth outlook, the stock could move higher.

Also on August 18, Collins Stewart said it expects 70c in EPS and revenue of $3.70B. They see ICD sales growth as being subdued at 8% YoY in the intermediate term, with low single digit growth. Collins believes the wild card for outperformance would be stronger than expected CRMD sales. Collins suggests investors remain patient and wait until Medtronic reclaims market share. The shares remain Hold rated. 

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Tagged: , Medical Appliances & Equipment
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