What’s the Outlook for Medtronic’s Segments in Fiscal 2018?




During the company’s 2Q18 earnings release on November 21, 2017, Medtronic (MDT) provided guidance for the full fiscal 2018. As the company maintained its previous guidance despite an adverse weather-related impact in the quarter, MDT stock gained around 5%. The Vanguard Growth ETF (VUG) registered a price rise of around 0.92% on the day. VUG holds ~1% of its total holdings in MDT.

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CVG segment performance estimates for fiscal 2018

Medtronic expects its CVG (Cardiac and Vascular Devices group) business to grow in a range of 5.5% to 7% in the full fiscal 2018 driven by the strength of its product portfolio augmented by new product launches. In 3Q18, the company expects solid growth due in part to a favorable prior-year comparison.

MITG segment’s fiscal 2018 performance expectations

Medtronic has lowered its MITG (Minimally Invasive Therapies Group) sales estimates for the full fiscal 2018 due to the pronounced impact of Hurricane Maria in 2Q18. The company now expects its fiscal 2018 MITG sales to be in the range of 3% to 3.5%, as compared to the previous guidance range of 3.5% to 4.5%.

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RTG segment’s fiscal 2018 performance outlook

Medtronic’s RTG (Restorative Therapies Group) segment continues to show strength in its brain therapies business offset by the competitive pressures in the spine business, which was also hurt by Hurricane Maria in the quarter. The company expects the segment growth to be around 3% for full fiscal 2018.

MDT’s diabetes segment outlook

As discussed above, the diabetes segment witnessed supply constraints in 1Q18, which led to the sales weakness in 2Q18 as well. Some of the peer companies in the diabetes segment include Abbott Laboratories (ABT), Dexcom (DXCM), and Boston Scientific (BSX). However, the segment performance is improving due to strong demand and the completion of Medtronic’s MiniMed 670G priority access program. The segment sales for the full fiscal 2018 are expected to register growth in the mid-to-high single digits.


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