HAMILTON, Bermuda, and MANSFIELD – For the fiscal year ended Sept. 26, medical device giant Covidien Ltd. (NYSE: COV) posted a profit of $1.36 billion, compared with a year-ago loss of $342 million, on revenue that rose 11.41 percent to $9.91 billion.
Diluted earnings per share amounted to $2.70 compared with the year-ago loss of 69 cents, the company said.
“We finished fiscal 2008 with our strongest quarterly operational results since becoming a public company in mid-2007,” said Richard J. Meelia, Covidien’s chairman, president and CEO.
Among segments, Medical Devices sales rose 12 percent compared with FY 2007 to $6.8 billion, boosted by favorable foreign exchange rates that contributed 4 percentage points of that growth. Imaging Solutions sales rose 13 percent to $1.2 billion, with exchange rates contributing 5 percentage points toward the gain. Pharmaceutical Products saw sales rise 12 percent to $1.0 billion. And Medical Supplies saw sales grow 4 percent compared with FY 2007 to $920 million.
“Growth was broad-based, with three of our four segments reporting double-digit increases. Our performance was especially strong in markets outside the United States, as we continued to benefit from the incremental investments made over the last few years to augment our sales force and expand geographically,” Meelia said. “Our Imaging segment, however, posted disappointing fourth-quarter results, but we have plans in place designed to improve its performance going forward.”
For its fiscal fourth quarter, Covidien posted a profit of $409 million, or more than 17 times the year-ago $24 million, on net sales that rose 11.97 percent to $2.57 billion. Diluted earnings per share rose to 82 cents from the 53 cents of the FY 2007 fourth quarter, the company said.
“Looking at 2009, we remain comfortable with the operational growth targets communicated at our Investor Day in September,” Meelia added. “Although reported results will most likely be negatively impacted by the recent strengthening of the U.S. dollar, we have a strong pipeline of new products, fueled by strategic investments in R&D, that will enhance our growth in the coming year and beyond.”
The company pared its sales forecast for FY 2009, which began Sept. 27. It cited “the recent strengthening of the U.S. dollar against most currencies, which negatively impacts sales and profit growth in the Medical Devices and Imaging Solutions segments.
“Operational growth [in those segments], excluding foreign exchange, remains at the previously communicated range of 6 percent to 9 percent for fiscal 2009. Including foreign exchange at current rates, net sales are expected to be negative 3 percent to flat versus 2008 in the Medical Devices segment and negative 4 percent to negative 1 percent in Imaging Solutions,” Covidien said. “There are no changes to previous 2009 guidance for the Pharmaceutical Products or Medical Supplies segments, where sales are expected to increase 20-plus percent and 2 percent to 5 percent, respectively.”
Excluding one-time items, the company projected an operating margin of 21.5 percent to 22.5 percent for all of FY 2009. Covidien this fall announced it was seeking state and local tax breaks for a planned $20 million Mansfield expansion that it hopes to complete this year. (READ MORE)
Covidien Ltd. (NYSE: COV; BSX: COV) – formerly Tyco Healthcare – is a leading manufacturer of health care devices and supplies for the global market. Based in Mansfield, Mass., it has its official headquarters in Bermuda. For more information, visit www.covidien.
