Medtronic cuts sales, revenue outlook

Medtronic Plc on Tuesday lowered its full-year outlook for profit and revenue growth, blaming a stronger dollar and a slower-than-anticipated recovery in supply-chain disruptions, sending the medical device maker’s shares down nearly 6%.

Rivals including Boston Scientific Corp and Stryker Corp have also recently lowered their full-year profit forecast and cautioned about the persistence of supply-chain constraints and the stronger dollar in the near term.

Medtronic lowered its fiscal 2023 adjusted profit forecast range to between $5.25 and $5.30 per share, from $5.53 to $5.65, as it continues to implement expense reductions under an ongoing restructuring plan.

“The company expects a 36 cent currency-related headwind to its bottom line for the fiscal year 2024,’’ finance chief Karen Parkhill said.

“Investors will continue to take a more cautious stance, given slower growth into year-end in an already challenged macro-environment,’’ JP Morgan analyst Robbie Marcus said.

Medtronic cut its revenue growth expectations for fiscal 2023 to 3.5% to 4%, from 4% to 5%.

The company said cost-cutting measures would likely offset lower revenue and inflationary pressures in the second half of the year.

Analysts said that Medtronic’s second-quarter performance was a reminder of the challenges that continue to pressure the medical-technology sector.

A slower-than-anticipated recovery in supply-chain disruptions impacted Medtronic’s medical surgical business the most, with the unit’s revenue falling 10% to $2.07 billion.

Total revenue for the second quarter ended Oct 28 came in below analysts’ expectations at $7.59 billion, which was also hurt by a sluggish recovery in nonurgent procedures.

However, Medtronic posted an adjusted profit above estimates at $1.30 per share.

Shares of the Dublin-based company fell to $76.69, hitting their lowest levels since March 2020.