Medtronic PLC kicked off its fiscal year beating analysts' expectations and presenting a pipeline that executives said would propel future revenues even further into the black.
Medtronic's diabetes and cardiovascular units have suffered from competition, resulting in lower sales. But executives on the Aug. 20 earnings call conveyed excitement over its current and up-and-coming line of surgical robots.
Net revenue of $7.49 billion beat the consensus estimates of $7.40 billion. After a series of lower-than-expected outcomes, the Dublin-based medical device company's pipeline signals a broad-based approach that shows signs of ultimately paying off, analysts said.
SVB Leerink analyst Danielle Antalffy said in an Aug. 20 note that the pipeline is "key to the company's ability to return to consistent growth in line with the broader MedTech markets." She noted that the general medical technology market is on a trajectory of about 5% growth.
After its 2018 acquisition of Israel's Mazor Robotics for spinal surgery, Medtronic is now looking to a September exhibition to showcase a new soft-tissue surgical robot it expects to launch outside the U.S. within the year.
"You'll get to see it in action versus just on a stage," Minimally Invasive Therapies President Robert White said on the call. "It's a really important event as we continue to gather preclinical data and experience in our system."
Also, the spinal surgery lineup from the $1.7 billion Mazor acquisition, which includes the Mazor X Stealth robot, gives Medtronic a leg up in a growing space.
"We think that the whole enabling technology and robotic strategy, that's where the market is going," Restorative Therapies Group President Geoffrey Martha said. "It's going to cause the market to consolidate around a few players, and we intend to lead that and take share now and going forward."
Medtronic aims to build out its robotics business into its various other areas, CEO Omar Ishrak said, particularly navigation systems and visualization.
"Let me tell you that in virtually every area that we have a procedural presence, we will look at robotics because that's how it's going to be," Ishrak said. "And we're learning from our current experience, but I can tell you that in the data analytics capability, we're just beginning to evolve."
Ishrak said Medtronic would help to change how surgery is done in the next decade.
"Make no mistake, this is a core area for us, and we'll see much more about robots than just the two that you're looking at today in the future," Ishrak said.
