Investors had added 5.3% to COV’s price as of about 11:45 this morning, sending shares to $56.18 despite a nearly 3% sales slide that just beat expectations on The Street.
Covidien posted full-year profits of $1.91 billion, or $3.92 per share, on sales of $11.85 billion for the 12 months ended Sept. 28, for bottom-line growth of 2.0% and a top-line addition of 2.4%.
Excluding 1-time items, earnings per share reached $4.26, 2 pennies ahead of analysts’ expectations.
During the 4th quarter, profits were $461 million, or 95¢ per share, on sales of $3.0 billion during its fiscal Q4, for profit growth of 2.2% and a 2.5% sales slide compared with Q4 2011. Adjusted EPS were $1.02, again 2¢ ahead of The Street.
President & CEO José Almeida said Q4 results were suppressed by 1 fewer selling week in 2012 and the strong dollar.
"In medical devices, our largest business segment, we continued to generate above-market growth, paced by new offerings," Almeida said in prepared remarks. "Despite the headwinds of today’s market environment and the U.S. medical device tax, we are confident that our robust pipeline of new products, attractive investment opportunities and capital flexibility will enable us to meet marketplace challenges and deliver good organic growth."
Covidien confirmed its expectation for sales growth of 3%-6% for fiscal 2013, he said. That would mean revenues of $12.21 billion-$12.56 billion, in line with expectations on The Street, where FY2013 adjusted EPS are pegged to reach $4.42.
In September, Covidien estimated that the hit from next year’s medical device tax, a 2.3% levy on U.S. medtech sales, will add $25 million to $30 million to its overhead, or 5 ¢per share. That means a $75 million to $90 million addition to selling, general & administrative expenses during FY2013, or 15¢ per share.