Medtronic(MDT) - 2026 Q3 - Quarterly Report

Financial Performance - Net income for the three months ended January 23, 2026, was $1,150 million, a decrease of 11.7% compared to $1,303 million for the same period in 2025[12] - Comprehensive income attributable to Medtronic for the nine months ended January 23, 2026, was $3,511 million, down from $4,085 million in the prior year, reflecting a decrease of 14%[12] - Net income for the nine months ended January 23, 2026, was $3,578 million, a slight decrease from $3,630 million for the same period in 2025[19] - Total consolidated net sales for the three months ended January 23, 2026, were $9,017 million, an increase from $8,292 million in the same period last year[138][139] - Total consolidated net sales for the nine months ended January 23, 2026, reached $26,557 million, up from $24,000 million in the previous year[142] Assets and Liabilities - Total current assets increased to $24,071 million as of January 23, 2026, compared to $23,814 million as of April 25, 2025, representing a growth of 1.1%[14] - Long-term debt rose to $27,880 million as of January 23, 2026, up from $25,642 million, indicating an increase of 8.7%[14] - Total liabilities decreased to $42,289 million from $43,424 million, a reduction of 2.6%[14] - Cash and cash equivalents decreased significantly to $1,147 million from $2,218 million, a decline of 48.3%[14] - Total shareholders' equity increased to $48,985 million as of January 23, 2026, compared to $48,024 million, marking a growth of 2%[14] Segment Performance - Cardiac Rhythm & Heart Failure segment reported net sales of $5,394 million for the nine months ended January 23, 2026, up 15.7% from $4,659 million in the same period last year[33] - Cardiovascular segment reported net sales of $3,457 million, while the Neuroscience segment generated $2,558 million, Medical Surgical segment $2,173 million, and Diabetes segment $796 million for the three months ended January 23, 2026[138] - Neuroscience segment revenue for the nine months ended January 23, 2026, reached $7,536 million, compared to $7,226 million for the same period in 2025, indicating a 4.3% growth[33] Cash Flow and Investments - Cash provided by operating activities for the nine months ended January 23, 2026, was $4,757 million, an increase from $4,516 million in the prior year[19] - Net cash used in investing activities was $2,017 million for the nine months ended January 23, 2026, compared to $1,447 million in the same period last year[19] - The company reported a net change in cash and cash equivalents of $(1,072) million for the nine months ended January 23, 2026, compared to $(44) million in the previous year, indicating a significant decline[19] Restructuring and Charges - Total restructuring costs for the three and nine months ended January 23, 2026, were $172 million and $251 million, respectively, compared to $46 million and $154 million for the same periods in the prior year[43] - The company anticipates pre-tax restructuring charges of approximately $300 million to $500 million, expected to be incurred between the third quarter of fiscal year 2026 and the completion of the MiniMed initial public offering[45] - The company recognized $36 million and $108 million in income from funded research and development arrangements during the three and nine months ended January 23, 2026, respectively[41] Tax and Legal Matters - The effective tax rate for the three months ended January 23, 2026, was 18.1%, up from 15.4% for the same period in 2025, primarily due to the Pillar Two global minimum tax impact[97] - The company's gross unrecognized tax benefits remained at $2.9 billion as of January 23, 2026, with a potential $2.7 billion impact on the effective tax rate if recognized[98] - The jury awarded $382 million in damages to Applied Medical, which will be automatically trebled by the court[115] Future Plans and Acquisitions - The company plans to separate its Diabetes business into a new independent publicly traded company, MiniMed Group, Inc., expected to be completed within 18 months from the announcement in May 2025[24] - The company announced an intention to acquire CathWorks Ltd. for up to $585 million, which is expected to enhance its Cardiovascular portfolio[149] Other Financial Metrics - Basic earnings per share for the three months ended January 23, 2026, was $0.89, down from $1.01 in the same period of 2025, while diluted earnings per share also decreased to $0.89 from $1.01[101] - Total dividends paid to shareholders amounted to $2,731 million for the nine months ended January 23, 2026, compared to $2,692 million in the prior year, indicating an increase of 1.5%[19] - The company reported a depreciation and amortization expense of $2,242 million for the nine months ended January 23, 2026, compared to $2,021 million in the previous year, an increase of 10.9%[19]