Medtronic (NYSE: MDT) anticipates tariffs imposed by the U.S. and reciprocal tariffs abroad will cost the company between $200 million and $350 million in its new fiscal year. In response, Medtronic announced plans to spin off its Diabetes business, likely through an IPO, to sharpen focus on its highest-margin growth areas.
Que Dallara, EVP and president of Medtronic Diabetes, will lead the new independent diabetes tech company as CEO. CEO Geoff Martha highlighted that the spin-off will simplify Medtronic’s portfolio and boost margins and earnings per share, offsetting tariff-related pressures.
Other leadership changes include Skip Kiil’s promotion to EVP and president of the Cardiovascular Portfolio, replacing Sean Salmon. Michael Carter will succeed Kiil in Cranial and Spinal Technologies.
Medtronic reported a strong Q4 with revenue up nearly 4% to $8.93 billion and adjusted EPS of $1.62, beating Wall Street expectations. Growth in pulsed-field ablation and neuroscience drove performance, alongside a 10.7% rise in Diabetes revenue.
Medtronic expects about 5% organic revenue growth in fiscal 2026 and forecasts adjusted EPS between $5.50 and $5.60, factoring in tariff risks. Martha emphasized the company’s efforts to mitigate tariff impacts and remains confident in its growth trajectory.
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