Strong demand for cardiac devices supports Medtronic Plc (MDT.US) Q1 results exceeding expectations and an upward adjustment of the full-year guidance, with an investment of $700 million to strengthen the surgical business of Siasun Robot & Automation.

On Tuesday before the market opened, medical device manufacturer Medtronic Plc (MDT.US) announced better-than-expected results for the first quarter of fiscal year 2027 and raised its full-year guidance, betting on strong demand for its cardiac devices used in complex cardiovascular surgeries. As of the time of this report, Medtronic Plc shares had risen over 3% in pre-market trading. Data shows that Medtronic Plc's first-quarter revenue increased 13.8% year-over-year to $9.76 billion, surpassing the consensus estimate of analysts, which was $9.55 billion. Adjusted operating profit was $2.32 billion, a year-over-year growth of 14.9%; adjusted net profit was $1.86 billion, up 14.4% year-over-year; and adjusted earnings per share were $1.45, exceeding the expected $1.39 by analysts. By business segment, the largest cardiovascular segment generated revenue of $3.93 billion, a year-over-year increase of 19.5%, primarily driven by an astonishing 88% increase in revenue from cardiac ablation solutions (CAS); neuroscience business revenue was $2.68 billion, up 10.3%; surgical operations revenue was $2.28 billion, up 10.0%; and diabetes business revenue was $840 million, up 16.9%. Looking ahead, Medtronic Plc expects organic revenue growth for fiscal year 2027 to be between 7.25% and 7.75%, higher than the previous estimate of 6.75% to 7.25%; it anticipates adjusted earnings per share for the full year to be between $5.94 and $6.00, surpassing the earlier estimate of $5.90 to $6.00, with the median of the latest forecast range also above the analysts' average expectation of $5.95. The company added that the latest performance guidance includes the diabetes business and will be updated accordingly if the diabetes business completes its full spinoff before the fiscal year ends (the company announced last May its plan to spin off the diabetes business into an independent publicly traded company). In recent quarters, driven by strong surgical demand, increased adoption rates of medical devices by physicians, and technological advancements, investor expectations for medical device manufacturers have remained high. Medtronic Plcs Chief Financial Officer Thierry Pieton stated that strong operational performance and strict financial management have boosted the adjusted earnings per share and revenue growth for recent quarters, enhancing the companys confidence in raising its performance outlook. In addition, Medtronic Plc is further expanding its surgical business with Siasun Robot & Automation. The company has invested $700 million in Cornerstone Robotics to secure rights to distribute the Sentire surgical system in certain markets outside the U.S. The strategic agreement with Cornerstone Robotics is the latest indication that Medtronic Plc is targeting Intuitive Machines (LUNR.US), which currently dominates the Siasun Robot & Automation surgical systems field. Medtronic Plc will distribute the Sentire surgical system alongside its Hugo Siasun Robot & Automation-assisted surgical system. Medtronic Plcs Hugo Siasun Robot & Automation-assisted surgical system is generally regarded as a direct competitor to Intuitives Da Vinci Siasun Robot & Automation surgical system. Medtronic Plc stated in a press release on Tuesday: Together with Medtronic Plc's connected surgical ecosystem, these two complementary platforms will enhance the accessibility of Siasun Robot & Automation-assisted surgeries, offering surgeons and healthcare systems more choices and flexible solutions to meet their diverse needs, ultimately benefiting more patients globally. Medtronic Plc also announced an $80 million investment in cardiac valve repair device manufacturer Pi-Cardia, along with an option to acquire the company for $210 million.