A month has gone by since the last earnings report for Medtronic (MDT Quick QuoteMDT - Free Report) . Shares have lost about 2.6% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Medtronic due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Medtronic Q1 Earnings Top Estimates, View Up

Medtronicreported adjusted earnings per share of $1.20 for first-quarter fiscal 2024 compared with the year-ago quarter’s earnings per share of $1.13. The figure moved up 1.6% and beat the Zacks Consensus Estimate by 8.1%.

Without certain one-time adjustments — including restructuring and associated costs, amortization, acquisition-related costs, among others— GAAP earnings per share was 59 cents, down 15.7% from the year-ago quarter’s reported figure.

Total Revenues

Worldwide revenues in the reported quarter grossed $7.70 billion, up 4.5% year over year on a reported basis and 6% on an organic basis. The top line exceeded the Zacks Consensus Estimate by 1.7%.

The company's organic revenue results reflect broad strength across businesses and geographies, driven by execution, innovation, and improved underlying fundamentals.

Segment Details

The company generates revenues from four major segments, namely Cardiovascular Portfolio, Medical Surgical Portfolio, Neuroscience Portfolio and Diabetes.

In the fiscal first quarter, Cardiovascular revenues increased 5.5% at CER to $2.85 billion, with all three divisions reporting organic growth this quarter. This compares with our model projection of $2.76 billion for Q1.

Cardiac Rhythm & Heart Failure sales totaled $1.45 billion, up 4.7% year over year at CER. Revenues from Structural Heart & Aortic were up 9.9% at CER to $814 million. Coronary & Peripheral Vascular revenues were up 1.7% year over year to $589 million.

In Medical Surgical, worldwide sales totaled $2.04 billion, up 5.5% year over year at CER. The Surgical & Endoscopy revenue grew 6.3% while Patient Monitoring & Respiratory Interventions revenues rose 2.9%. This compares with our model projection of $2.12 billion for Q1.

In Neuroscience, worldwide revenues of $2.22 billion were up 4.9% year over year and 5.6% organic, with mid-single digit organic increases in CST, Specialty Therapies, and Neuromodulation. This compares with our model projection of $2.15 billion for Q1.

Revenues in the Diabetes group rose 6.8% at CER and 6.3% on organic to $578 million.  The company registered high-teens growth in Non-U.S. Developed Markets accelerated from recent quarters on increased MiniMed 780G system adoption, increased CGM attachment rates on the strength of the Guardian 4 sensor, and geographic expansion. This compares with our model projection of $540.2 million for Q1.

Margins

Gross margin in the reported quarter expanded 1 basis points (bps) to 65.0% on a 4.5% rise in cost of revenues.

Research and development expenses were down 3.5% year over year at $668 million. Selling, general and administrative expenses rose 1.8% to $2.61 billion.

Adjusted operating margin expanded 163 bps year over year to 23.3%

Guidance

Medtronic raised fiscal 2024 guidance.

Fiscal 2024 organic revenue growth is expected to be 4.5% (up from the earlier guided range of 4-4.5%). The organic revenue growth guidance excludes the impact of foreign currency and revenue related to certain businesses reported as Other. If foreign currency exchange rates as of the beginning of August hold, FY24 revenue growth on a reported basis would be approximately 2.75%.

The Zacks Consensus Estimate for the company’s fiscal 2024 worldwide revenues is pegged at $32.16 billion.

The full-year adjusted earnings per share is expected in the range of $5.08 to $5.16 (previous guided range was $5.00- $5.10). The Zacks Consensus Estimate for the year’s adjusted earnings is $5.05.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates.

VGM Scores

Currently, Medtronic has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Medtronic has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Medtronic belongs to the Zacks Medical - Products industry. Another stock from the same industry, Haemonetics (HAE Quick QuoteHAE - Free Report) , has gained 6.6% over the past month. More than a month has passed since the company reported results for the quarter ended June 2023.

Haemonetics reported revenues of $311.33 million in the last reported quarter, representing a year-over-year change of +19.1%. EPS of $1.05 for the same period compares with $0.58 a year ago.

Haemonetics is expected to post earnings of $0.94 per share for the current quarter, representing a year-over-year change of +13.3%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.

Haemonetics has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.