Medtronic (MDT) Stock Gains on Preliminary Fourth Quarter Results

NEW YORK (TheStreet) -- Medtronic (MDT) shares are up 1.24% to $78.43 in afternoon trading on Tuesday after the medical device manufacturer reported preliminary fourth quarter earnings results before the opening bell today.

The company said that fourth quarter sales for the period ended April 24 were $7.3 billion, a 60% increase over the previous year, ahead of analysts' consensus $7.08 billion expectations for the quarter.

Additionally, the company said that its EPS would be in the upper half of its previously announced guidance between $1.08 and $1.13 per share. Analysts' are expecting earnings of $1.10 per share.

"As we look ahead to fiscal year 2016, we feel increasingly confident about our business outlook on an operational basis. However, foreign exchange continues to represent a significant headwind to many multinational companies, including Medtronic," CFO Gary Ellis said. "While recently the U.S. dollar has weakened, it is important to note that the foreign exchange rates in our fourth quarter were below the rates assumed in the outlook we forecast on our third-quarter earnings call in February."

Medtronic is scheduled to release its quarterly earnings report two weeks from today on June 2.

TheStreet Ratings team rates MEDTRONIC PLC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate MEDTRONIC PLC (MDT) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, solid stock price performance, good cash flow from operations and growth in earnings per share. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • MDT's revenue growth has slightly outpaced the industry average of 0.6%. Since the same quarter one year prior, revenues slightly increased by 3.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 30.66% and other important driving factors, this stock has surged by 25.73% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, MDT should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Net operating cash flow has slightly increased to $1,767.00 million or 9.61% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -10.82%.
  • MEDTRONIC PLC has improved earnings per share by 30.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, MEDTRONIC PLC reported lower earnings of $3.01 versus $3.38 in the prior year. This year, the market expects an improvement in earnings ($4.39 versus $3.01).
  • You can view the full analysis from the report here: MDT Ratings Report

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