Key Takeaways STERIS sees strong AST momentum, with service revenues up 13% and division growth of 10%. STE's Healthcare revenues rose 9% on robust consumables, capital equipment and expanding service demand. Foreign-exchange volatility and higher operating expenses continue to pressure STERIS' performance. STERIS plc’s (STE) service revenues are driving growth in its Applied Sterilization Technologies (“AST”). The Healthcare segment is gaining from the successful market adoption of its comprehensive offeri ...

Core Insights - Medtronic plc is expanding its global presence in the Cardiovascular business, which is expected to support growth in upcoming quarters [1] - The company is gaining market share in Neuroscience, particularly in Cranial and Spinal technologies, aided by strong growth and competitor exits [1] - International expansion remains robust, contributing significantly to revenue growth [1] Cardiovascular Business - Medtronic's cardiac rhythm management segment continues to lead the market, driven by strong performance in Defibrillation Solutions and cardiac pacing therapies [3] - The fiscal third quarter of 2025 saw the cardiovascular portfolio grow in the mid-single digits, with the Cardiac Ablation Solutions business achieving 22% growth [4] - The next-generation Micra AV2 and VR2 leadless pacemakers are key drivers of growth as they penetrate new and existing markets [3] Neuroscience Portfolio - The Neuroscience portfolio, particularly Cranial and Spinal technologies, is experiencing strong growth, with Medtronic gaining market share as competitors exit the market [5] - In Neuromodulation, the Inceptiv spinal cord stimulator drove 12% growth in the fiscal third quarter, while brain modulation saw 15% global growth and 26% growth in the U.S. [6] International Expansion - Nearly 49% of Medtronic's revenues were generated internationally in the third quarter of fiscal 2025, with emerging markets growing in high-single digits [7] - Significant growth was noted in India (high-teens), Eastern Europe (mid-teens), and low-double-digit growth in Southeast Asia, the Middle East, and Africa [9] Financial Performance - Medtronic has a market capitalization of $108.05 billion and an earnings yield of 6.92%, significantly higher than the industry's yield of 0.05% [2] - The Zacks Consensus Estimate for fiscal 2025 earnings per share (EPS) is $5.46, with revenues estimated at $33.48 billion, reflecting a 3.4% increase from the previous year [12]

Financial Data and Key Metrics Changes - For Q1 2025, the company reported net income of $21.1 million, or 17 cents per diluted common share, compared to 20 cents per diluted common share in Q4 2024 [8][9] - Net interest income after provision expense was $96 million, up 4% from $92 million in Q4 2024 [10] - Non-interest expense for Q1 was $81.3 million, reflecting typical first-quarter increases in salary and employee benefits [10][25] Business Line Data and Key Metrics Changes - Total deposits increased to $14.5 billion, a 1% increase from the previous quarter, with a decrease in broker deposits to less than 7% of total deposits [13] - Loans receivable decreased to $13.3 billion, down 2% from year-end 2024, with residential mortgage loans increasing by 7% and commercial loans decreasing by 5% [14] - Loan production increased by 11% year-over-year, despite elevated paydowns and refinancing activities [15][16] Market Data and Key Metrics Changes - The company noted strong demand from Korean subsidiary sector customers, with an acceleration of direct investments in the U.S. by Korean companies [17][18] - The loan-to-value ratio for commercial real estate loans remained low at approximately 46% [19] Company Strategy and Development Direction - The company aims to strengthen its deposit base and position for prudent growth, focusing on organic loan growth and the integration of Territorial Bank [12][32] - The outlook for 2025 includes high single-digit percentage loan growth and mid-20s percentage growth in non-interest income, reflecting stronger momentum across fee income lines [34] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding macroeconomic volatility and the potential for a recession, but remains optimistic about loan demand from Korean customers [17][32] - The company expects net interest income growth to be in the high single-digit percentage range for 2025, revised from low double-digit growth expectations [33] Other Important Information - The merger with Territorial Bank was completed on April 2, 2025, contributing approximately $1.7 billion in stable low-cost deposits [11][12] - The company declared a quarterly common stock dividend of 14 cents per share, payable on May 16, 2025 [12] Q&A Session Summary Question: Impact of fewer rate cuts on NII growth outlook - Management indicated that fewer rate cuts would have a modest downward impact on NII, as the benefits of cutting deposit costs would offset the compression on variable rate loans [38][39] Question: Details on loan verticals for organic growth - Management highlighted positive momentum in pipelines for specialized commercial lending verticals, including healthcare and project finance, supported by recent team expansions [44] Question: Specific segments for loan growth in the second half - Management reiterated confidence in loan growth from Korean subsidiary sectors and specialized teams, with good momentum in their pipelines [48] Question: Asset quality and points of stress - Management reported stable asset quality and proactive monitoring of the portfolio, with borrowers diversifying supply chains to mitigate potential impacts from tariffs [52]