Medtronic raises annual profit forecast on strong demand for heart devices
Medtronic also said it has decided to exit its unprofitable ventilator product line within its patient monitoring and respiratory interventions business.
Toronto: Medical device maker Medtronic on Tuesday raised annual profit forecast for the third time this fiscal, banking on higher demand for its heart and diabetes devices, sending the company's shares up nearly 4 per cent in premarket trading.
Demand for medical devices has picked up pace as non-urgent procedures, which were deferred during the pandemic, recovered in the past year with easing hospital staff shortages and people becoming regular with check-ups.
Medtronic expects adjusted profit for the fiscal 2024 to be between $5.19 and $5.21 per share, compared with its previous forecast range of $5.13 and $5.19 per share.
Sales at the company's heart devices unit, its biggest revenue driver, increased 6.1 per cent to $2.93 billion, versus analysts' estimate of $2.89 billion.
Sales at the diabetes unit were $640 million, also above analysts' estimate of $601.9 million.
Medtronic also said it has decided to exit its unprofitable ventilator product line within its patient monitoring and respiratory interventions (PMRI) business.
CEO Geoff Martha had said in November the company was planning to spin off its PMRI business, which is a part of its medical surgical portfolio, by the first half of the next fiscal year.
Medtronic said on Tuesday it would combine the remaining businesses within PMRI operating units into a single unit.
The company also said these operational changes would eliminate the position of executive vice president and president of medical surgical portfolio, currently held by Robert White. White would leave the company effective April 26.
Medtronic's revenue for the third quarter rose 4.7 per cent to $8.09 billion. Analysts on average estimated $7.95 billion, according to LSEG data.
The company posted adjusted profit of $1.30 per share for the quarter, compared with analysts' estimate of $1.26 per share.
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