Covidien reports bumps in sales and profit
Covidien, headquartered in Dublin, Ireland, but with its U.S. operations based in Mansfield, noted that it had made “significant improvement” in its gross and operating margins. The company reported a gross margin of 55.6 percent, compared with 54.4 percent in the prior-year period, due in part to sales, benefits from a restructuring program and favorable foreign exchange.
However, Richard J. Meelia, chairman, president and CEO, 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 & Monitoring, Vascular and Energy products.”
Research and development expense represented 4.3 percent of net sales, versus 5.2 percent of sales 2009 period, when expenses included $30 million in licensing fees relating to two transactions in the pharmaceuticals segment.
Medical Devices sales of $1.63 billion in the third quarter grew 6 percent in comparison with the $1.54 billion of Q3 2009. For the first nine months of the fiscal year, Medical Devices sales were up 11 percent to $4.94 billion. Favorable foreign exchange contributed approximately 4 percentage points to the increase, according to Covidien.
A press release detailing the full financial report is available on Covidien’s website.
Earlier this week Covidien reported that it has completed its tender offer through a subsidiary, Covidien DE Corp., to purchase all of the outstanding common shares of Somanetics Corp. of Michigan in a deal that would be worth about $250 million.