Covidien plc (NYSE:COV) is upbeat about its prospects for fiscal 2011.
The Mansfield, Mass.-based medical products giant predicted a sales increase of 6 percent to 9 percent over 2010, CFO Charles Dockendorff told investors yesterday. The company reported revenues of $7.76 billion through the nine-month period ending June 26, compared to $7.67 billion for the same period in 2009, a 1 percent increase.
Covidien estimates that its medical devices business will post a 10 percent to 13 percent uptick over 2010’s numbers, with medical supplies flat to 3 percent above this year. Covidien is expecting losses of up to 5 percent for its pharmaceutical segment.
“[W]e optimized our portfolio [in 2010] which we expect will better position us for future growth. This included the acquisitions of Aspect, ev3 and Somanetics and the divestiture of several slower growth, low-margin product lines," CEO Richard Meelia said in prepared remarks.
The company’s purchases paid off during the third quarter. Its VNUS and Aspect Medical Systems buyouts boosted the company’s device business revenues, helping Covidien to a $364 million profit on $2.56 billion in sales. The company also concluded the sale of its specialty chemicals and sleep therapy businesses in late August and closed a deal for its U.S. radiopharmacies business in June.