Why Medtronic Stock Is Sinking Today

Core Viewpoint - Medtronic's shares declined by 7.3% following the announcement of its fiscal 2025 third-quarter results, which revealed a revenue miss despite better-than-expected earnings [1][2]. Financial Performance - Medtronic reported third-quarter revenue of $8.3 billion, reflecting a year-over-year increase of 2.5%, but slightly below the Wall Street estimate of $8.33 billion [2]. - The diluted earnings per share (EPS) were reported at $1.01 under GAAP, while the adjusted EPS was $1.39, marking a 7% increase year-over-year and surpassing the analysts' average estimate of $1.35 [2]. Revenue Concerns - The revenue miss is attributed to a change in U.S. distributor buying patterns, as explained by CEO Geoff Martha, who indicated that this disruption is expected to be resolved soon [3]. - Despite the revenue miss, the company projects organic revenue growth for fiscal 2025 to be between 4.75% and 5% [4]. Future Outlook - Medtronic anticipates adjusted EPS for the current fiscal year to be in the range of $5.44 to $5.50, with the midpoint exceeding the consensus Wall Street EPS estimate of $5.45 [4]. Investment Considerations - The stock may not appeal to growth investors, but it could be attractive to income investors due to a forward dividend yield of 3.24% [5]. - Medtronic is close to potentially joining the Dividend Kings, having a track record of 47 consecutive years of dividend increases [5].