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Medtronic lowered its earnings forecast for fiscal year 2026 after its diabetes spinoff, MiniMed, went public. The revised outlook includes a charge MiniMed will pay after the recent clearance of its newest insulin pump.
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Medtronic now expects adjusted earnings per share of $5.50 to $5.54 for its fiscal year 2026 ending in April, the company disclosed in a securities filing Tuesday. The range is a decrease of 12 cents from the company’s forecast in February.
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Private equity firm Blackstone helped fund the development of the new insulin pump, called MiniMed Flex. MiniMed expects a one-time charge of $157 million in its fiscal fourth quarter related to future payments to Blackstone, which affects Medtronic because of its 90% ownership stake in the spinoff.
MiniMed began trading on the Nasdaq in early March. Medtronic expects an earnings decrease of about 4 cents per share due to the timing of the initial public offering.
Medtronic had planned to spin out MiniMed in a two-step process, with an IPO followed by a split, CFO Thierry Piéton explained in a February earnings call. Piéton said Medtronic expects dilution of one to two cents per month between the time of the IPO and the split. Otherwise, Medtronic expects the diabetes spinoff to be accretive to its earnings.
Medtronic also expects an earnings hit of about 8 cents per share related to MiniMed Flex. Because Blackstone helped fund development of the insulin pump, it will either receive royalty payments as a percentage of sales or specified minimum payments, according to the filing.
This agreement is not expected to have an impact on Medtronic’s results in its 2027 fiscal year.
The FDA clearance for MiniMed’s insulin pump, announced on March 18, came much earlier than anticipated, J.P. Morgan analyst Robbie Marcus wrote in a research note on Tuesday.
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