Covidien saw its third-quarter profits rise 4 percent, largely due to a strong contribution from its U.S.-based medical device business units, which helped soften the blow dealt by weaker-performing segments.
Total net sales reached $2.5 billion for the three-months ended June 30, a 3 percent decline from the $2.6 billion the Mansfield-based device leviathan posted during the same period last year. Covidien attributed most of the slide to poor currency exchange rates.
But the company still managed to produce impressive margins, north of 54 percent, incrementally higher than last year’s third-quarter margins.
Covidien’s performance was weaker on a consecutive-quarter comparison: During the three-months ended March 31, the company posted a top line of $2.7 billion, as it reaped the rewards of a court settlement allowing its Mallinckrodt pharmaceuticals unit to continue selling a generic Oxycontin equivalent. But that deal, with Stamford, Conn.-based Perdue Pharma LP, expired during the second quarter.
The company’s largest unit, its medical devices business, managed to hold steady with last year’s pace, posting quarterly sales of $1.7 billion. That’s down 5 percent from the $1.8 billion posted during the third quarter of 2008. Most of that slide came from softer overseas revenues, where sales fell 7 percent to $955 million during the quarter, down from $1 billion during the year-ago quarter.
In the U.S the medical devices unit fared better, with sales jumping 4 percent to $779 million during the quarter, largely on an 11 percent uptick in vascular segment revenues, particularly dialysis products.
Other business units didn’t perform as well. The imaging solutions business took a 6 percent hit, posting $299 million in Q3 sales, compared to $319 million for the same period last year. And the pharmaceutical products segment posted Q3 sales of $245 million, down 5 percent from $257 million during the third quarter of fiscal 2008.
For the nine-months ended June 30, the company posted $7.7 billion in sales, 4 percent ahead of last year’s pace. But net income is down 10 percent compared with the first three quarter of fiscal 2008.