Covidien books solid Q4, already bolstered by ev3

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Covidien has reported an increase in income and revenue results for the fourth quarter of fiscal 2010, which ended Sept. 24.

Fourth quarter net sales of $2.67 billion increased 3 percent from the $2.59 billion reported a year ago, with foreign exchange rate movement reducing the quarterly sales growth rate by approximately one percentage point, according to the Dublin-based company.

In the fourth quarter of 2010, Covidien reported net income of $443 million, versus $56 million in the same period the year before.

“During 2010, we made significant progress in reshaping our portfolio, acquiring Aspect [Medical Systems], ev3 and Somanetics, all of which are meeting or exceeding our expectations,” said Richard J. Meelia, Covidien's chairman, president and CEO. “We divested the specialty chemicals business, U.S. nuclear pharmacies and sleep and oxygen product lines, reallocating resources to faster growing areas of our business.”

Meelia added that the company’s “strong performance was led by our largest business segment, medical devices, which posted another good quarter paced by strong gains in vascular, oximetry and monitoring and energy products.”

Specifically, vascular sales climbed more than 70 percent, reflecting the addition of ev3 products and double-digit increases for venous insufficiency and compression products. “ev3’s sales and profitability performance in the quarter exceeded our expectations and, as a result, the acquisition was only slightly dilutive to earnings per share,” Covidien said.

Medical devices sales of $1.77 billion in the fourth quarter were 9 percent above the $1.63 billion in the comparable quarter of last year.

Pharmaceuticals sales of $465 million in the fourth quarter were down 12 percent from last year’s fourth-quarter sales of $530 million. The company said the decline primarily reflected the sale of its U.S. nuclear pharmacies business in the third quarter, coupled with a sales decline in specialty pharmaceuticals.