Covidien's Q3 income rises, despite radiopharma slip

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Covidien has reported strong results for the third quarter of fiscal 2010, which ended June 30.

In the third quarter of 2010, the company reported operating income of $539 million, versus $441 million in the same period the year before.

Third quarter net sales of $2.56 billion increased 2 percent from the $2.52 billion reported a year ago, with foreign exchange rate movement having no impact on the quarterly sales growth rate, according to the Dublin-based company.

Medical device sales of $1.63 billion in the third quarter were 6 percent above the $1.54 billion in the comparable quarter of last year, Covidien reported. In its airway and ventilation unit, sales were below those of a year ago, primarily due to lower sales of sleep products following the divestiture of the diagnostics product line. Vascular sales climbed at a double-digit pace, due to the addition of VNUS and Bacchus products and higher sales of compression products.

The company said its pharmaceuticals sales were $507 million in the third quarter, down 6 percent from last year’s third-quarter sales of $539 million. Operationally, Covidien reported that quarterly sales of active pharmaceutical ingredients and contrast products declined somewhat from those of the year before. Sales of radiopharmaceuticals were also below those of a year ago, largely reflecting the sale of the U.S. nuclear pharmacy business during the quarter, the company noted.

“Although top-line performance, particularly in pharmaceuticals, did not meet our expectations, our largest business segment, medical devices, posted another good quarter, led by strong growth for oximetry and monitoring, vascular and energy products," said Richard J. Meelia, Covidien's chairman, president and CEO.