Earlier this month, medical technology and services company Medtronic cut its full-year earnings and saw shares fall by more than 8%.
Medtronic
The reason for the falling stock? The company’s second quarter revenue fell short of Wall Street’s expectations for the second time in four quarters according to Investopedia.
The low earnings were reportedly caused by a decreased amount of sales in relation to the company’s cardiovascular and diabetes products.
However, whilst the low earnings and falling stock might be viewed in a negative light, investors aren’t too worried. Joshua Jennings, an investor from financial services firm Cowen said: “We will be on the lookout for MDT’s new product introduction impact especially in CVG and Diabetes. We remain positive on MDT’s long-term fundamental organic revenue (5%+) and EPS (10%+) growth trajectories.”
Indeed, a Reuter’s survey of 25 brokerage companies, held after Medtronic released its quarterly earnings, rated the company’s stock as strong. 76% of analysts rated its stock as “buy”, 24% rated it “hold” and not one investor was telling people to sell their stocks.
Medtronic expect its fiscal 2017 growth to be within the mid-single digit range, consistent with the company’s past growths. The company is in a good position as well, with several major products in the cardiac and vascular group segments yet to be launched Medtronic will hopefully start to see returns.
One of the most important products for the company is its MiniMed 670G “artificial pancreas” which automatically regulates insulin flow for type 1 diabetes patients. The device has received approval by the FDA and has been hailed as a “breakthrough” product.