Covidien Ltd. Third Quarter Earnings Sneak Peek

Covidien Ltd. (NYSE:COV) will unveil its latest earnings on Tuesday, July 26, 2011. Covidien PLC is engaged in the development, manufacture and sale of healthcare products for use in clinical and home settings. It operates its businesses through three segments: Medical Devices, Pharmaceuticals and Medical Supplies. Baxter Earnings Cheat Sheet: Revenue Growth Drives Margin, Profit Increases>>

Covidien Ltd. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for profit of 95 cents per share, a rise of 11.8% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved up from 94 cents. For the year, analysts are projecting net income of $3.86 per share, a rise of 14.2% from last year.

Past Earnings Performance: The company has beaten estimates the last four quarters and is coming off a quarter where it topped forecasts by 4 cents, reporting profit of 93 cents per share against a mean estimate of net income of 89 cents per share.

Savvy Investing Tip: Our CHEAT SHEET investing framework recommends only stocks with two straight quarters of earnings growth. Learn More >>

Wall St. Revenue Expectations: On average, analysts predict $2.86 billion in revenue this quarter, a rise of 11.7% from the year ago quarter. Analysts are forecasting total revenue of $11.43 billion for the year, a rise of 9.6% from last year’s revenue of $10.43 billion.

Analyst Ratings: Analysts are bullish on this stock with 18 analysts rating it as a buy, none rating it as a sell and two rating it as a hold.

Key Stats:

The company has now seen net income rise in three straight quarters. In the second quarter, net income rose 10.2% while it rose 3.6% in the first quarter and more than sevenfold in the fourth quarter of the last fiscal year.

The company’s revenue has now risen for two straight quarters. In second quarter, revenue increased 5.2% to $2.8 billion from the year earlier quarter. In the first quarter, the figure rose 0.7%.

Competitors to Watch: C.R. Bard, Inc. (NYSE:BCR), Teleflex Incorporated (NYSE:TFX), Becton, Dickinson and Co. (NYSE:BDX), Baxter International Inc. (NYSE:BAX), Angiotech Pharmaceuticals, Inc. (NASDAQ:ANPI), CareFusion Corporation (NYSE:CFN), CONMED Corporation (NASDAQ:CNMD), AngioDynamics, Inc. (NASDAQ:ANGO), and Masimo Corporation (NASDAQ:MASI).

Stock Price Performance: During May 23, 2011 to July 20, 2011, the stock price had fallen $3.59 (-6.5%) from $55.39 to $51.80. The stock price saw one of its best stretches over the last year between April 18, 2011 and April 27, 2011 when shares rose for seven-straight days, rising 7.3% (+$3.83) over that span. It saw one of its worst periods between August 23, 2010 and August 31, 2010 when shares fell for seven-straight days, falling 8% (-$3.02) over that span. Shares are up $6.50 (+14.3%) year to date.

(Source: Xignite Financials)

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