Covidien’s profits drop in 2Q as sales rise 5%

COVIDIEN PLC's bottom line fell 11.7 percent year over year in the second quarter, the company announced Friday.
Posted 4/26/13

MANSFIELD – Medical technology maker Covidien Plc reported second-quarter earnings of $439 million, or 92 cents per diluted share, an 11.7 percent drop from the $497 million, or $1.02 per diluted share, it reported during the second quarter of 2012.

At the same time, the company’s sales rose 5.3 percent year over year to $3.1 billion during the three months ended March 29.

“Our second-quarter performance was paced by broad-based top-line growth and an increase in earnings per share,” José E. Almeida, president and CEO, said in a prepared statement.

Year over year in the second quarter, the company’s medical device sales grew 1 percent in the U.S. and 7 percent in non-U.S. markets. Pharmaceutical division sales increased 20 percent during the first quarter of fiscal 2013 in the U.S., but dropped 2 percent in non-U.S. markets, and Covidien’s medical supplies segment revenue rose 1 percent in the U.S. and stayed stagnant outside the U.S. during the quarter.

“Once again in our medical devices segment, strong results in stapling, vessel sealing and neurovascular products were the key drivers of our growth,” said Almeida, adding that the company also delivered “a significantly sales increase” in the pharmaceuticals segment – a growth led by strong performances in both generic and branded products.

“While our reported performance was negatively affected by unfavorable exchange rate movement, operational growth was in line with our expectations and we again generated rapid gains in emerging markets,” Almeida said. “Looking forward, we plan to make the investments necessary to enhance our growth, while continuing to deliver a solid earnings performance.”

Almeida added that the company’s “robust pipeline” of new products, increased market opportunities and capital flexibility should “enable us to meet the challenges of the global healthcare marketplace and deliver on our expectations.”

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