Medtronic PLC shares have declined by approximately 6.4% in the month following its most recent earnings report, a performance that trails the S&P 500 index. The stock has underperformed despite the company reporting first-quarter fiscal 2027 results that exceeded analyst expectations and raising its full-year financial outlook.
The medical device manufacturer reported adjusted earnings per share of $1.45 for the quarter, a 15.1% increase from the same period last year. This figure surpassed the Zacks Consensus Estimate by 4.3%. On a generally accepted accounting principles basis, earnings per share stood at $1.14, up from 81 cents in the prior year period. Revenues grew 13.7% year over year to $9.76 billion, beating consensus estimates by 3%. The quarter included an additional fiscal week, which contributed approximately $570 million to organic growth.
Growth across Medtronic's segments remained broad-based. Cardiovascular revenues reached $3.93 billion, rising 19.5% on a reported basis and 18.9% organically. Within this segment, Electrophysiology Therapies revenues increased by 29.1%, while Interventional Cardiology Therapies revenues grew 6.5% organically. Neuroscience revenues totaled $2.68 billion, up 10.3% reported and 9.3% organically, with Cranial and Spinal Technologies leading the portfolio at 12.9% organic growth. Medical Surgical revenues were $2.28 billion, up 10% year over year, and Diabetes revenues jumped 16.9% to $843 million.
Geographically, U.S. revenues rose 16.1% to $4.91 billion, with U.S. Cardiovascular increasing by 25.3%. International revenues advanced 11.4% to $4.85 billion, with International Diabetes recording 16.8% organic growth. The company's gross margin held steady at 65% compared to the prior year period. This stability came despite a rise in production costs, which reached $3.42 billion after excluding amortization charges on intangible assets. Research and development expenses rose 6.2% to $771 million, while selling, general and administrative expenses increased 14% to $3.20 billion.
Medtronic raised its fiscal 2027 organic revenue growth outlook to a range of 7.25% to 7.75%, up from the previous range of 6.75% to 7.25%. The company also lifted its adjusted earnings per share guidance to $5.94 to $6.00 from the prior outlook of $5.90 to $6.00. This guidance incorporates an estimated neutral to 1% accretive foreign currency impact based on recent exchange rates and highlights recent acquisitions of Scientia Vascular and SPR Therapeutics.
Despite the strong report, analyst estimates for Medtronic have trended downward over the past month, resulting in a Zacks Rank #3 Hold rating. The stock currently holds an aggregate VGM Score of B, with an A Momentum Score and a B Value Score that places it in the top 40% for that strategy. In contrast, Agilent Technologies, a peer in the Zacks Medical Products industry, has gained 13.8% over the past month and holds a Zacks Rank #2 Buy rating following its own quarterly report.