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Medtronic’s Revenue Is Estimated to Rise in Fiscal 2Q17

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Medtronic’s revenue estimates

On November 22, 2016, Medtronic (MDT) will announce its fiscal 2Q17 earnings for the period that ended on October 31, 2016. Wall Street expects the company’s fiscal 2Q17 revenue to be ~$7.5 billion, a rise of ~5.7% YoY (year-over-year). The company’s fiscal 1Q17 revenue was ~$7.2 billion, a fall of ~1% YoY.

In fiscal 1Q17, Medtronic’s comparable constant currency sales growth came in at ~5%. Its fiscal 1Q17 revenue was weighed down by the negative impact of currency headwinds and one extra selling week in 1Q16. Medtronic expects its fiscal 2Q17 sales to rise in the company’s full-year growth range of 5%–6%. It’s expected to benefit from a positive foreign exchange impact of ~$25 million–$75 million.

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The above graph shows a comparison of Medtronic’s actual reported revenues and analysts’ estimates in previous quarters. In fiscal 1Q17, Medtronic’s actual revenue failed to meet analysts’ expectations, largely due to falls in three out of four of the company’s business segments, namely CVG (Cardiac and Vascular Group), MITG (Minimally Invasive Therapies Group), and RTG (Restorative Therapies Group). The Diabetes segment was the only segment that reported a YoY rise of ~2% in sales.

For the latest developments in the Diabetes segment, read Medtronic’s Latest Developments on the Diabetes Front. The company also witnessed a slowdown in emerging market sales. Its growth vector services and solutions suffered the most, contributing ~30 basis points to its revenue growth, compared to its contribution goal of 40–60 basis points.

Major competitors

Among Medtronic’s major competitors, Johnson & Johnson (JNJ), Stryker (SYK), and Becton, Dickinson and Company (BDX) registered revenues of ~$17.8 billion, $2.8 billion, and $3.2 billion, respectively, in their most recent quarters. Investors interested in gaining exposure to Medtronic can consider investing in the iShares Core S&P 500 ETF (IVV). Medtronic accounts for ~0.59% of IVV’s total holdings.

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