Medtronic (NYSE:MDT) CFO Gary Ellis said the world’s largest pure-play device maker plans to shave at least $1.2 billion in costs from its operations, even as the company closes out a five-year, $1 billion initiative that lowered its expenses by 25 percent.
Ellis said the new initiative is aimed at slashing another 25 percent from the budget, which could lead to as much as $1.3 billion in savings, Ellis told BusinessWeek.
"Twenty-five percent is the initial target," New CEO Omar Ishrak added. "We’re working on long-term programs right now that take cost out dramatically in the future."
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MDT shares are up 4.7 percent since the company announced strong second-quarter results last week, beating Wall Street’s earnings expectations and confirming its outlook for the rest of fiscal 2012.
Shares were trading at $34.85 today as of about 10:30 this morning, up 3.5 percent on the day.
Ellis said the numbers indicate that softness in the markets for two of Medtronic’s core businesses, spinal implants and cardiac rhythm management devices, may be stabilizing, according to the news magazine.
The results suggest that both markets are starting to stabilize, Ellis said.
