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Medtronic’s New Leader Outlines Growth Strategy PDF Print E-mail

The new chief executive of Medtronic, the world’s largest medical device maker, vowed on Tuesday to revive the company’s growth by further expanding it internationally and improving its returns from research spending.

Omar Ishrak, who took over the company in June, said Medtronic remained committed to returning cash to shareholders and to exploring smaller acquisitions.

He also said he planned no major changes to the company’s diversified portfolio of medical devices except for the planned sale or spinoff of its external defibrillator business.

Mr. Ishrak’s comments, made on the company’s fiscal first-quarter conference call, gave the first glimpse of his strategy since he took over.

The company reported quarterly results that met analysts’ estimates. Net income in its fiscal first quarter, which ended July 29, was $821 million, compared with $830 million during the same period a year ago. Revenue in the quarter rose to $4.05 billion, 7.3 percent higher than the same period a year earlier. Analysts had expected $3.98 billion.

Medtronic shares rose 6.2 percent to close at $33.10, reflecting relief the results were better than some had feared and optimism that Mr. Ishrak, a former executive at General Electric, had struck the right note on Tuesday.

“From the point of view of setting the stage, I think he did a pretty good job,” said Jan Wald, an analyst at Morgan Keegan & Company.

“He came across as sort of a tough guy, one who is going to be relentless in his pursuit of data and execution,” he said.

Medtronic is struggling with weak demand and pricing in its important markets for heart defibrillators and spine products.

In part, the slow demand is the result of a weak economy. But a study suggesting that heart devices are improperly used in patients who are too sick for them, and accusations in a medical journal that researchers hid serious complications with the company’s Infuse bone growth product, have also slowed sales.

Mr. Ishrak said the fallout from those problems would persist.

Read more http://feeds.nytimes.com/click.phdo?i=5f4dd5e140cf4741c96f96cab13d7f23