Medtronic forecasts annual profit below estimates as stronger dollar weighs

(Reuters) -Medtronic Plc on Thursday forecast annual profit below Wall Street estimates, as the medical device maker expects stronger dollar to continue dragging its sales down in international markets.

Medtronic has warned of a delayed improvement in earnings this year as its costs continue to remain high despite restructuring efforts.

It expects profit to be in the range of $5 per share to $5.10 per share for the fiscal year 2024, lower than analysts’ estimates of $5.20 per share, according to Refinitiv IBES data.

Separately, Medtronic said it will buy South Korea-based insulin patch maker EOFlow for a total consideration of 971 billion won ($738 million) in a bid to boost its diabetes devices business.

The deal, which is expected to close in the second half of this year, could begin to add to earnings from the fourth year, the company said.

Medtronic has been in the process of restructuring since last few years to focus on its core units – heart and diabetes devices – but it continues to be under the costs pressure due to surging inflation and supply chain constraints.

However, it reported a better-than-expected profit for the fourth quarter, helped by a recovery in non-urgent surgical procedures that were delayed during the pandemic.

Excluding items, the Dublin-based company reported a profit of $1.57 per share for the quarter, slightly above analysts’ average estimate of $1.56 per share.

Quarterly sales at Medtronic’s heart devices unit, its largest segment, increased 12% to $3.32 billion from a year earlier, compared with estimates of $3.03 billion.

($1 = 1,320.9300 won)

(Reporting by Bhanvi Satija and Raghav Mahobe in Bengaluru; Editing by Shweta Agarwal)