Covidien (NYSE:COV) said today that it’s changing the way it reports its financial results and lowered its sales guidance for fiscal 2014.
The Mansfield, Mass.-based medtech maker said it now expects to take a top-line hit from foreign exchange rates of 1.0% to 1.25%, but affirmed prior guidance for overall sales growth of 2%-5%.
Covidien also said it will now report results for its 3 major product areas, in addition to results for its 2 major divisions, medical devices and medical supplies. The new reporting structure, set to take effect with the release of Covidien’s fiscal 1st-quarter results next month, will see it report on sales for its surgical solutions, vascular therapies and respiratory & patient care segments, according to a press release. And it will break down new figures for geographies outside the U.S. by emerging and developed markets.
"Our new revenue reporting format more closely reflects the way we operate our business, providing our stakeholders with enhanced transparency," CFO Charles Dockendorff said in prepared remarks. "This approach underscores our continuing commitment to communicating our business results clearly and consistently."
Covidien said it expects surgical solutions and vascular therapies sales to grow 3%-6% each, with patient & respiratory care sales up 1%-4%. Adjusted operating margins are expected to be in the 21.5% to 22.5% range, according to the release.
Sales for Given Imaging, which Covidien agreed to acquire for $860 million last week, will be reported under the advanced surgical rubric within the surgical solutions segment. And sales for Covidien’s Confluent Surgical business, which it agreed to sell to Integra LifeSciences (NSDQ:IART) for $235 million, will be reported until the sale as general surgical products, also within the surgical solutions segment category, according to the release. The new guidance numbers don’t reflect either move, as they haven’t closed yet, Covidien said.
Covidien issued revised financial statements the fiscal years ending Sept. 27, 2013 and Sept. 28, 2012, plus new quarterly statements for fiscal 2013 and updated product line sales numbers reflecting its new reporting structure.
