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Will Strong RTG Arm Shape Medtronic's (MDT) Q2 Earnings?
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Medtronic plc’s (MDT - Free Report) Restorative TherapiesGroup (“RTG”) has been on a strong growth trajectory of late, courtesy of solid contribution from majority of the sub-segments.
We expect this strength to reflect in second-quarter fiscal 2019 results, which are scheduled to release on Nov 20, before the opening bell.
Click here to know how the company’s overall Q2 performance is expected to be.
RTG in the Spotlight
RTG consists of Spine, Brain Therapies, Specialty Therapies and Pain Therapies divisions.
The company is encouraged by the 6.8% constant currency growth in RTG business in the last reported quarter. In fact, the quarter marked the best quarterly performance by the RTG business.
Per management, strength in the Pain and Brain Therapies segments will continue to offset any adverse impact from the weakening spine market.
Medtronic currently expects 4-4.5% revenue growth in RTG business in fiscal 2019. For the fiscal second quarter, management expects 5-5.5% revenue growth in RTG business.
The Zacks Consensus Estimate for RTG revenues of $1.93 billion indicates a rise of 3.8% from the year-ago quarter.
Let's see how things are shaping up for these sub-segments before second-quarter results.
Brain Therapies: In Brain Therapies, which now includes Neurovascular and Neurosurgery businesses, the company has been witnessing major developments. The Neurovascular business grew high-teens on solid contributions from the stroke portfolio in the last reported quarter. The company also witnessed strong growth in stents, flow diversion, and access products.
The company is expected to see continued uptake of products from its Neurovascular portfolio in the yet-to-be-reported quarter.
The Neurosurgery business grew high-teens on solid demand for StealthStation S8 surgical navigation system, solid capital equipment sales of the O-arm 2 surgical imaging system, Visualase MRI-guided laser ablation system and the Mazor X robotic guidance systems for spine surgeries.
In April, Medtronic had announced the CE Mark receipt and launch of the Visualase MRI-Guided Laser Ablation System in Europe. These are expected to reflect in the to-be-reported quarter results.
Medtronic also announced the U.S. launch and receipt of FDA approval for its Deep Brain Stimulation (DBS) Clinician Programmer and Activa Programming Application in June. Notably, the product has been made available in Europe. This development is also expected to drive Brain Therapies revenues in the to-be-reported quarter.
The Zacks Consensus Estimate for the Brain Therapies business in the United States is pegged at $355 million, reflecting a 6% rise year over year.
Pain Therapies: The Pain Therapies division, which now includes Pain (Spinal Cord Stimulation and Drug Pumps) and Interventional Spine businesses, contributed substantially to the company’s top line in first-quarter fiscal 2019. Pain Therapies growth was led by low-twenties growth in Pain Stimulation, low-double digit growth in Targeted Drug Delivery and high-single digit growth in Interventional Pain, all on a constant currency basis. Medtronic also witnessed solid uptake of Intellis platform for spinal-cord stimulation as well as Evolve workflow algorithm and Snapshot reporting.
The company saw the best quarter of SynchroMed II Intrathecal Drug Delivery system sales growth in the previous quarter.
Within Interventional Pain Therapies division, Medtronic received 510(k) clearance for Kyphon HV-R Bone Cement for fixing pathological fractures of the sacral vertebral body by using sacral vertebroplasty or sacroplasty.
In view of the company’s efforts to develop its Pain Therapies division,we believe that the solid trend will reflect in the to-be-reported quarter results as well.
Spine: Medtronic’sSpine division includes the Core Spine, BMP and Kanghui businesses.
Per management, the combination of enabling technologies like imaging, navigation, powered instruments, nerve monitoring and Mazor Robotics with spine implants has spurred growth for this division.
Medtronic has been steadily progressing with initiatives to boost its Spine business. In this regard, in May, the company announced the launch of a titanium 3D printed platform — TiONIC Technology — which allows more complicated designs and integrated surface technologies for spine surgery implants. It also announced the SynergyTLIF workflow which enables a minimally-invasive procedure with lesser intra-operative surgical steps for spinal surgery.
Weexpect encouraging top-line contributions from the Spine business in the fiscal second quarter.
Zacks Rank & Key Picks
Medtronic currently carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the broader medical space are Stryker Corporation (SYK - Free Report) , Masimo Corporation (MASI - Free Report) and Veeva Systems (VEEV - Free Report) .
Masimo’s long-term earnings growth rate is projected at 14.6%. The stock carries a Zacks Rank #2.
Veeva Systems’ long-term earnings growth rate is estimated at 19.3%. The stock carries a Zacks Rank #2.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Will Strong RTG Arm Shape Medtronic's (MDT) Q2 Earnings?
Medtronic plc’s (MDT - Free Report) Restorative TherapiesGroup (“RTG”) has been on a strong growth trajectory of late, courtesy of solid contribution from majority of the sub-segments.
We expect this strength to reflect in second-quarter fiscal 2019 results, which are scheduled to release on Nov 20, before the opening bell.
Click here to know how the company’s overall Q2 performance is expected to be.
RTG in the Spotlight
RTG consists of Spine, Brain Therapies, Specialty Therapies and Pain Therapies divisions.
The company is encouraged by the 6.8% constant currency growth in RTG business in the last reported quarter. In fact, the quarter marked the best quarterly performance by the RTG business.
Per management, strength in the Pain and Brain Therapies segments will continue to offset any adverse impact from the weakening spine market.
Medtronic PLC Price and EPS Surprise
Medtronic PLC Price and EPS Surprise | Medtronic PLC Quote
Medtronic currently expects 4-4.5% revenue growth in RTG business in fiscal 2019. For the fiscal second quarter, management expects 5-5.5% revenue growth in RTG business.
The Zacks Consensus Estimate for RTG revenues of $1.93 billion indicates a rise of 3.8% from the year-ago quarter.
Let's see how things are shaping up for these sub-segments before second-quarter results.
Brain Therapies: In Brain Therapies, which now includes Neurovascular and Neurosurgery businesses, the company has been witnessing major developments. The Neurovascular business grew high-teens on solid contributions from the stroke portfolio in the last reported quarter. The company also witnessed strong growth in stents, flow diversion, and access products.
The company is expected to see continued uptake of products from its Neurovascular portfolio in the yet-to-be-reported quarter.
The Neurosurgery business grew high-teens on solid demand for StealthStation S8 surgical navigation system, solid capital equipment sales of the O-arm 2 surgical imaging system, Visualase MRI-guided laser ablation system and the Mazor X robotic guidance systems for spine surgeries.
In April, Medtronic had announced the CE Mark receipt and launch of the Visualase MRI-Guided Laser Ablation System in Europe. These are expected to reflect in the to-be-reported quarter results.
Medtronic also announced the U.S. launch and receipt of FDA approval for its Deep Brain Stimulation (DBS) Clinician Programmer and Activa Programming Application in June. Notably, the product has been made available in Europe. This development is also expected to drive Brain Therapies revenues in the to-be-reported quarter.
The Zacks Consensus Estimate for the Brain Therapies business in the United States is pegged at $355 million, reflecting a 6% rise year over year.
Pain Therapies: The Pain Therapies division, which now includes Pain (Spinal Cord Stimulation and Drug Pumps) and Interventional Spine businesses, contributed substantially to the company’s top line in first-quarter fiscal 2019. Pain Therapies growth was led by low-twenties growth in Pain Stimulation, low-double digit growth in Targeted Drug Delivery and high-single digit growth in Interventional Pain, all on a constant currency basis. Medtronic also witnessed solid uptake of Intellis platform for spinal-cord stimulation as well as Evolve workflow algorithm and Snapshot reporting.
The company saw the best quarter of SynchroMed II Intrathecal Drug Delivery system sales growth in the previous quarter.
Within Interventional Pain Therapies division, Medtronic received 510(k) clearance for Kyphon HV-R Bone Cement for fixing pathological fractures of the sacral vertebral body by using sacral vertebroplasty or sacroplasty.
In view of the company’s efforts to develop its Pain Therapies division,we believe that the solid trend will reflect in the to-be-reported quarter results as well.
Spine: Medtronic’sSpine division includes the Core Spine, BMP and Kanghui businesses.
Per management, the combination of enabling technologies like imaging, navigation, powered instruments, nerve monitoring and Mazor Robotics with spine implants has spurred growth for this division.
Medtronic has been steadily progressing with initiatives to boost its Spine business. In this regard, in May, the company announced the launch of a titanium 3D printed platform — TiONIC Technology — which allows more complicated designs and integrated surface technologies for spine surgery implants. It also announced the SynergyTLIF workflow which enables a minimally-invasive procedure with lesser intra-operative surgical steps for spinal surgery.
Weexpect encouraging top-line contributions from the Spine business in the fiscal second quarter.
Zacks Rank & Key Picks
Medtronic currently carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the broader medical space are Stryker Corporation (SYK - Free Report) , Masimo Corporation (MASI - Free Report) and Veeva Systems (VEEV - Free Report) .
Stryker has a long-term expected earnings growth rate of 10% and a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Masimo’s long-term earnings growth rate is projected at 14.6%. The stock carries a Zacks Rank #2.
Veeva Systems’ long-term earnings growth rate is estimated at 19.3%. The stock carries a Zacks Rank #2.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>