Covidien plc Earnings Cheat Sheet: Margins Expand Again, Profit Rises

Covidien plc (NYSE:COV) reported net income above Wall Street’s expectations for the most recent quarter. 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.

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Covidien plc Earnings Cheat Sheet for the Third Quarter

Results: Net income for Covidien plc rose to $535 million ($1.07 per share) vs. $364 million (72 cents per share) in the same quarter a year earlier. This marks a rise of 47% from the year earlier quarter.

Revenue: Rose 14.1% to $2.93 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: COV reported adjusted net income of $1.01 per share. By that measure, the company beat the mean estimate of 95 cents per share. It beat the average revenue estimate of $2.86 billion.

Quoting Management: “We delivered another strong quarter, and, for the fourth quarter in a row, results significantly exceeded our own expectations,” said Jose’ E. Almeida, President and CEO. “These results were spurred by the performance of our largest business segment, Medical Devices, which again reported substantial growth that was led by excellent increases for Vascular and Energy products. We continued to benefit from several successful new product launches and from market share gains in an increasingly competitive global healthcare marketplace.”

Key Stats:

Last quarter marked the fifth consecutive quarter of gross margins expanding as the company’s gross margin expanded 1.5 percentage points to 57.1% from the year earlier quarter. Over that span, margins have grown on average 2.2 percentage points per quarter on a year-over-year basis.

The company has now seen net income rise in three straight quarters. In the second quarter, net income rose 10.2% and in the first quarter, the figure rose 3.6%.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 4 cents in the second quarter, by 14 cents in the first quarter, and by 10 cents in the fourth quarter of the last fiscal year.

Revenue has now gone up for three straight quarters. In the second quarter, revenue rose 5.2% to $2.8 billion while the figure rose 0.7% in the first quarter from the year earlier.

Competitors to Watch: Covidien plc (6COP), 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).

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(Source: Xignite Financials)