Strong demand for cardiac devices drives Medtronic (MDT.US) to exceed Q1 expectations and raise full-year guidance; invests $700 million to expand robotic surgery business.

According to information from Zhihui Finance APP, before the US stock market opened on Tuesday, medical device manufacturer Medtronic (MDT.US) announced better-than-expected results for the first quarter of fiscal year 2027 and raised its full-year guidance, betting on strong demand for its cardiac devices used in complex cardiovascular surgeries. As of press time, Medtronic's shares were up more than 3% in pre-market trading on Tuesday.

Data shows that Medtronic’s first-quarter revenue rose 13.8% year-on-year to $9.76 billion, surpassing analysts' general expectation of $9.55 billion. Adjusted operating profit was $2.32 billion, an increase of 14.9% year-on-year; adjusted net profit was $1.86 billion, an increase of 14.4% year-on-year; adjusted earnings per share were $1.45, better than the analysts' general expectation of $1.39.

By business segment, the largest cardiovascular business reported revenue of $3.93 billion, up 19.5% year-on-year—mainly driven by an 88% year-on-year surge in revenue from Cardiac Ablation Solutions (CAS); neuroscience business revenue was $2.68 billion, an increase of 10.3% year-on-year; medical surgical business revenue was $2.28 billion, an increase of 10.0% year-on-year; diabetes business revenue was $840 million, an increase of 16.9% year-on-year.

Looking ahead, Medtronic expects the organic revenue growth rate for fiscal year 2027 to be between 7.25% and 7.75%, higher than the previous projection of 6.75% to 7.25%; full-year adjusted earnings per share are expected to be $5.94 to $6.00, higher than the previous estimate of $5.90 to $6.00, with the new midpoint also above analysts’ average forecast of $5.95. The company added that the latest guidance includes the diabetes business, and if the full spin-off of the diabetes business (announced last May as a plan to become an independent listed company) is completed before the fiscal year ends, the company will update this outlook accordingly.

In recent quarters, expectations for medical device manufacturers have remained high, supported by strong demand for surgical procedures, increased adoption of medical devices by physicians, and advances in technology. Medtronic CFO Thierry Pieton said that strong operational performance and strict financial management have driven recent quarterly increases in adjusted earnings per share and revenue, which has bolstered the company’s confidence in raising its performance outlook.

In addition, Medtronic is further expanding its robotic surgery business. The company has invested $700 million in Cornerstone Robotics and gained rights to distribute Cornerstone’s Sentire surgical system in markets outside the United States. The strategic agreement with Cornerstone Robotics is Medtronic’s latest move to target Intuitive Machines (LUNR.US), which currently dominates the robotic surgical systems sector.

Medtronic will distribute the Sentire surgical system alongside its Hugo robotic-assisted surgery system. Medtronic’s Hugo system is commonly viewed as a direct competitor to Intuitive’s Da Vinci robotic surgical system. In a news release on Tuesday, Medtronic stated: “By integrating Medtronic’s connected surgical ecosystem, these two complementary platforms will expand access to robotic-assisted surgery and provide surgeons and medical systems with more choices and more flexible solutions to meet diverse needs and benefit more patients worldwide.”

Medtronic also announced it will invest $80 million in cardiac valve repair device manufacturer Pi-Cardia and has secured an option to acquire the company for $210 million.