Medtronic Beats Q4 Forecasts, Hikes Dividend, Plans Diabetes Spinoff

Medtronic plc (NYSE:MDT) reported fourth-quarter 2025 sales of $8.93 billion, beating the consensus of $8.82 billion.

The medical device maker reported:

• Adjusted EPS of $1.62, beating the consensus of $1.58.
• A year-over-year revenue increase of 3.9% and 5.4% Y/Y organically.
• Cardiovascular segment revenue reaching $3.34 billion, up 6.6% year over year as reported, and increased 7.8% Y/Y organically.
• An increase in low-double-digit in CRHF, high-single-digit in SH&A, and low-single-digit in CPV (all on an organic basis).
• Neuroscience revenues of $2.62 billion rose 2.9% Y/Y as reported. They rose 3.7% Y/Y organically, aided by an increase in low-double-digit in Neuromodulation and mid-single-digit in CST, all on an organic basis.
• Medical Surgical revenue of $2.21 billion increased by 0.6% Y/Y as reported and by 2.0% Y/Y organically, with a low-single-digit organic growth in both SE and ACM segments.
• Diabetes revenue of $728 million increased by 10.4% Y/Y, as reported, and by 12.0% Y/Y organically.

Dividend Increase: Effective May 20, the company’s board approved an increase in cash dividend per share by 1.4% to 71 cents for the first quarter of fiscal year 2026

The dividend is payable on July 11, 2025, to shareholders of record as of June 27, 2025.

Guidance: Medtronic expects its fiscal year 2026 organic revenue growth guidance of 5%.

If recent foreign currency exchange rates hold, FY26 revenue growth would be around  4.8% to 5.1% on a reported basis.

Medtronic expects 2025 adjusted EPS of $5.50-$5.60 versus consensus of $5.83.

Diabetes Business Separation: Medtronic disclosed its intention to separate its Diabetes business into a new standalone company.

This move aims to create a more focused entity with a streamlined portfolio concentrated on high-margin growth markets.

The separation, expected within 18 months, will occur through capital markets transactions, with an initial public offering (IPO) followed by a split-off as the preferred method.

Upon separation, Medtronic anticipates an immediate improvement of approximately 50 basis points in adjusted gross margin, 100 basis points in adjusted operating margins, and an immediate accretion to adjusted EPS.

The separation is also expected to allow Medtronic to retire outstanding shares without impacting cash, leading to further EPS accretion and a reduced dividend liability.

Investors can gain exposure to the stock via Madison ETFs Trust Madison Covered Call ETF (NYSE:CVRD) and Absolute Select Value ETF (NYSE:ABEQ).

Price Action: MDT stock is down 0.14% at $86.25 premarket at the last check on Wednesday.

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