Covidien (NYSE:COV) beat Wall Street’s earnings expectations for both its fourth quarter and 2011 fiscal year, sending shares up nearly 3 percent this morning.
The Mansfield, Mass.-based health care giant’s medical device segment once again led the charge, posting an 18 percent sales increase for Q4 and 17 percent for the full year.
Fourth-quarter profits rose 1.8 percent to $451 million, or 92 cents per share, on sales of $3.08 billion for the three months ended Sept. 30. That compares with profits of $443 million, or 89 cents per share, on sales of $2.67 billion during the same period last year.
For the full year, profits were $1.87 billion, or $3.76 per share, on sales of $11.57 billion. That’s a bottom-line boost of 14.5 percent compared with fiscal 2010 profits of $1.63 billion, or $3.24 per share, on sales of $10.43 billion.
Adjusted to exclude one-time items, Q4 earnings per share were $1.08; full-year adjust EPS were $3.76 – each three pennies over The Street’s prediction. Wall Street analysts were looking for adjusted Q4 EPS of $1.05 and full-year adjusted EPS of $3.94.
“Looking to 2012, we remain comfortable with the sales and operating margin guidance we issued in September,” president & CEO José Almeida, said in prepared remarks. “Although the market environment continues to be challenging, our expectations for the operational growth of our business have not changed.”
Covidien said it expects sales to increase between 3 percent and 5 percent during fiscal 2012, with sales up 4 percent to 7 percent for the medical device segment.
Medical devices in the vanguard
The company’s medical device unit posted Q4 sales of $2.09 billion, up 18 percent compared with $1.77 billion during Q4 2010. Full-year med-tech sales reached $7.83 billion, up 17 percent from $6.72 billion during FY2010. Covidien said acquisitions, new products and greater volume drove the increases.
U.S. medical devices sales were $921 million during the quarter, up 15 percent; international sales were $1.17 billion, up 21 percent. Covidien’s vascular products segment led with a 36 percent increase, to $393 million, followed by energy devices with a 22 percent increase, to $316 million.
Oximetry and monitoring sales were up 18 percent to $226 million in Q4. Endomechanical instrument sales rose 17 percent to $624 million. Covidien said growth for its soft tissue repair unit was softer during the quarter, up 8 percent to $230 million “as higher sales of sutures were partially offset by a decline for mesh, fixation and biosurgery products,” according to a press release. Airway & ventilation sales rose 7 percent to $198 million.
Fourth-quarter pharmaceutical sales were $507 million, up 9 percent, but fell 1 percent to $1.97 billion for the full year, “primarily attributable to the divestiture of the U.S. nuclear pharmacies business in fiscal 2010.” Sales of medical supplies were $481 million during Q4, up 11 percent, and $1.78 billion for the full year, up 3 percent.
COV shares were trading at $48.70 this morning as of about 9:35, up 2.9 percent.