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Medtronic Won't Spin Off Units, Cut Sales Force: CEO

Despite calls from some of its investors,Medtronic won't be spinning off any more business units, Chief Executive Omar Ishrak told CNBC Tuesday.

Medtronic Maximo DR implantable cardioverter-defibrillator
AP
Medtronic Maximo DR implantable cardioverter-defibrillator

The company recently sold its Physio-Control unit but "the rest of our portfolio, while we examine it periodically, right now we think there’s considerable synergies between the business units. The different business units are better as part of Medtronic and we’re in a position to win in all of them," he said.

The Minneapolis-based maker of defibrillators and other medical devices reported higher-than-expected earnings Tuesday, as sales of newer devices helped make up for an ongoing slump in its best-selling heart and spine implants. Overall revenue rose 3 percent in the second fiscal quarter to $4.13 billion, helped by sales of heart valves, stents and other upgraded products, Medtronic reported.

Here's another thing Medtronic won't be doing: cutting its sales force, despite a reported increase in selling, general, and administrative expenses.

"We really intend to keep our sales force in front of our customers and not really compromise that, especially in this market," Ishrak said. "A lot of our sales people are really clinical specialists and they actually deliver care. We need to be very careful before we remove any critical element of the health-care delivery our customers depend on."

Ishrak said emerging markets, in particular China and India, have enormous potential.

"If the devices we have today were taken as a standard of care [in China] we’d have a $7 billion opportunity and we’re only $500 million there" right now, he said.

— The Associated Press contributed to this report.