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.