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(Reuters) – Steady sales of pacemakers and heart stents may have likely helped Medtronic (NYSE:MDT) Plc offset weak demand for its other medical devices, in a quarter that saw an Omicron-led surge in COVID-19 cases and staffing crisis at most U.S. hospitals.
Overwhelmed by soaring infections and shortages of nurses and other healthcare workers, hospitals had to put off non-critical surgical procedures, denting demand for knee and spine implants made by companies such as Medtronic and Zimmer Biomet.
“Medtronic has areas you know, for example, in cardiac surgery … those procedures are not seeing delays, but in areas where we can defer like spine, spinal cord stimulation, that’s where they’re going to see more of an impact,” said BTIG analyst Ryan Zimmerman.
“So it’s less severe for Medtronic, but it’s certainly generally going to lower their fiscal third-quarter 2022 numbers.”
Medtronic’s heart devices unit has boosted revenue – https://graphics.reuters.com/MEDTRONIC-PREVIEW/dwpkrjxxnvm/chart.png
THE CONTEXT
** During its second quarter ended Oct. 29, the hit to sales of some of Medtronic’s products such as its spinal devices, which rely on elective procedures, was offset by the strength in its business that sells critical implants including pacemakers and other heart devices.
** Smaller rivals Zimmer Biomet and Edwards Lifesciences (NYSE:EW) have said the pressure on elective procedures has continued early into the year.
Medtronic’s spinal devices unit is a key part of its neuroscience business – https://graphics.reuters.com/MEDTRONIC-PREVIEW/akveznbknpr/chart.png
THE FUNDAMENTALS
** Medtronic, which reports results on Feb. 22, is expected to post third-quarter revenue of $7.88 billion, according to the mean estimate from 12 analysts, based on Refinitiv data
** Medtronic reported second-quarter revenue of $7.85 billion
WALL STREET SENTIMENT
** The current average rating on Medtronic shares is “buy”, with six analysts rating it “strong buy”, 15 “buy” and nine “hold”
** Wall Street’s median 12-month price target is $128
** The company’s shares have fallen about 1.69% so far this year
