Medtronic PLC (NYSE:MDT) stock rose 0.89% (As on February 22, 11:22:46 AM UTC-4, Source: Google Finance) after the company expects inflation in various markets to hit its profit in the next fiscal year after the medical device maker beat earnings estimate for the third quarter on strong demand for its heart and diabetes devices. The company also expects 80% of its portfolio to come under the Chinese government’s volume-based procurement (VBP) by the end of fiscal 2024, under which the country will buy medical devices in bulk at a sharp discount. Third quarter U.S. revenue of $4.062 billion represented approximately 52% of company revenue and increased 3% as reported and 2% organic. Non-U.S. developed market revenue of $2.294 billion represented 30% of company revenue and decreased 6% as reported and increased 6% organic. Emerging Markets revenue of $1.371 billion represented 18% of company revenue and decreased 1% as reported and increased 5% organic.

MDT in the third quarter of FY 23 has reported the adjusted earnings per share of $1.30, beating the analysts’ estimates for the adjusted earnings per share of $1.27, according to Refinitiv data. The company had reported flat adjusted revenue growth to $7.7 billion in the third quarter of FY 23 an increase of 4.1% on an organic basis. The company’s third quarter organic revenue results reflect strong performances in the Cardiovascular and Neuroscience portfolios, in Diabetes markets outside the U.S., as well as improved product availability across certain businesses. This was partially offset by unfavorable impacts from ventilator sales, given the increased COVID-19 related demand in the prior year, and sales in China, given volume-based procurement (VBP) tenders and the impact of COVID-19 resurgence on procedure volumes.

Moreover, Cardiovascular revenue of $2.772 billion increased 1% as reported and 7% organic, with high-single digit increases in CRHF and SHA and a low-single digit increase in CPV, all on an organic basis. Medical Surgical revenue of $2.137 billion decreased 7% as reported and 2% organic, with low-single digit declines in both SI and RGR. Excluding the unfavorable impact of ventilator sales, given the increased COVID-19 related demand in the prior year, and sales in China, given the unfavorable impact of provincial VBP tenders, Medical Surgical revenue increased 3% organic.

Following the beat, the company, whose financial year ends in April, also raised the low end of its 2023 profit outlook to $5.28 per share, from $5.25 it forecast in November. The top end of its forecast remains at $5.30.