Covidien posts net income jump for Q2, double-digit gains in radiopharma

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Covidien has reported strong results for the second quarter of fiscal 2010, which ended March 27.

Net sales of $2.7 billion were down 5 percent from the $2.8 billion reported a year ago, with favorable foreign exchange of $98 million increasing the quarterly sales growth rate by approximately 3 percentage points, according to Covidien. The sales decline was primarily due to the 2009 sales of oxycodone hydrochloride extended-release tablets.

Overall, the net income rose to $413 million in the second quarter, compared with $184 million in the second quarter of 2009.  In the second quarter of 2010, the Dublin-based company reported operating income of $561 million versus $548 million in the same period the year before. The 2009 operating income was adversely impacted by a $183 million charge for shareholder settlements. Also, Covidien said its second-quarter 2010 effective tax rate was 21.5 percent, versus 64.1 percent in the second quarter of 2009, which included certain one-time charges.

Specifically, the company said its medical devices sales of $1.62 billion in the second quarter were 11 percent above the $1.46 billion in the comparable quarter of last year. Operational growth was 5 percent, reflecting new products and increased volume.

Also, its pharmaceuticals sales of $619 million in the second quarter were 2 percent below last year's adjusted sales of $631 million. Operationally, second-quarter 2010 sales were 5 percent below those of the previous year. Sales in the 2010 second quarter benefited from a double-digit increase in radiopharmaceuticals, aided by a supply situation that improved from the year before and by higher thallium sales, according to Covidien. Operationally, quarterly sales of contrast products and active pharmaceutical ingredients declined from those of a year ago.