Covidien plc (NYSE:COV) can thank its medical device division for the 4.7 percent increase to its top line during its first quarter.
Sales for the Mansfield, Mass.-based company’s devices segment rose 11.1 percent during the three months ended Dec. 24, 2010, to $1.88 billion. For Covidien’s two other segments, pharmaceuticals and medical supplies, the trend was in the opposite direction. Pharma revenues slipped 8.0 percent to $470 million; medical supplies revenues were down 4.7 percent, to $422 million, compared with the same period last year.
Overall sales were $2.77 billion, leading to profits of $427 million, or 86 cents per diluted share, during the quarter. That’s up from profits of $412 million, or 82 cents diluted EPS, on sales of $2.64 billion during the fiscal 2010 first quarter.
“The excellent performance of our largest business segment, medical devices, was paced by strong gains in vascular, oximetry and monitoring and energy products,” president and CEO Richard Meelia said in >prepared remarks. “Integration of our 2010 acquisitions — Aspect, ev3 and Somanetics — is proceeding as planned, and all three businesses are meeting or exceeding our expectations.”
Meelia said Covidien will double down on its growth initiatives, maintaining a “substantial” increase in its R&D spend, which spiked 21.4 percent to $119 million during the quarter.
“Although we face some market-related softness in certain businesses, we are confident that our solid portfolio additions, robust pipeline of significant offerings across our businesses and strategic investments funded by our strong cash flow will drive superior operational results for the remainder of 2011 and beyond,” he said.
COV shares were up about 4.5 percent in early-morning trading, to $49.59.