UPDATED: JPM: Medtronic's Ishrak promises more M&A, globalization
|Medtronic CEO Omar Ishrak--courtesy of Medtronic.|
SAN FRANCISCO-- Medtronic's ($MDT) executives will devote their energies in 2013 to M&A, accelerating the company's global expansion and adjusting to the U.S. health reform law, CEO Omar Ishrak told a standing-room-only crowd at the J.P. Morgan Healthcare Conference in San Francisco early Monday.
Ishrak's "stay-the-course" message during the investor presentation comes along with some positive news about earnings. Executives revised Medtronic's guidance for fiscal 2013 diluted earnings per share, with a narrower guidance. Predictions are now for diluted earnings per share to range from $3.66 to $3.70, versus the previous estimate of $3.62 to $3.70.
Four cents may not seem like a lot, but that reflects an extra $30 million to $35 million, the company explains--an upswing driven by the recent renewal of the U.S. government's research and development tax credit as part of congressional passage of the "fiscal cliff" legislation.
During Ishrak's presentation, he emphasized to a morning audience that Medtronic continues to drive hard to focus on globalizing its revenue generation, with a particular focus on China and India and their unique market needs. Both "are great opportunities for us," he explained, "but each must be treated differently."
Meanwhile, the Minnesota device giant continues to transform its business model to adapt to the changing U.S. healthcare landscape. Ishrak acknowledged that, as a result, the company must prove the economic value and effectiveness of products it already has on the market. That means the company will have to transform its own business and pursue new product development ideas such as concept testing with hospitals, he said, in order to display a product's economic worth.
And "if there is economic value, hospitals will be interested in participating with us and partnering with us," he said.
As far as M&A, expect that to continue apace, while a focus on acquisitions could add to the company's newer grouping into cardiovascular, neuro/ortho and diabetes segments. This, Ishrak said, should "enable more commercial and technical synergies." Shortly after that statement, investors and fans treated him like a rock star, walking with and peppering him with questions as he proceeded to a Q&A session in another room.
Editor's note: This story has been updated to add Medtronic's revised fiscal 2013 earnings guidance and further highlights from Israk's presentation.
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