Covidien plc Earnings: Margins Keep Growing, Net Income Climbs

Covidien plc (COV) reported its results for the first quarter. Covidien 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 First Quarter

Results: Net income for Covidien plc rose to $494 million ($1.02 per share) vs. $427 million (86 cents per share) in the same quarter a year earlier. This marks a rise of 15.7% from the year earlier quarter.

Revenue: Rose 4.7% to $2.9 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: COV was about in line with expectations as the mean analyst estimate of $1.03 per share. Analysts were expecting revenue of $2.92 billion.

Quoting Management: “We are off to an excellent start in fiscal 2012, with good sales gains, record gross and operating margins and double-digit EPS growth,” said Jos E. Almeida, President and CEO. “This strong performance was again led by our largest business segment, Medical Devices, which delivered growth fueled by double-digit advances in Energy and Vascular products.

Key Stats:

The company has now seen net income rise in three straight quarters. In the fourth quarter of the last fiscal year, net income rose 1.8% and in the third quarter of the last fiscal year, the figure rose 47%.

Revenue has risen the past four quarters. Revenue increased 15.3% to $3.08 billion in the fourth quarter of the last fiscal year. The figure rose 14.1% in the third quarter of the last fiscal year from the year earlier and climbed 5.2% in the second quarter of the last fiscal year from the year-ago quarter.

The company fell short of forecasts after beating estimates in the previous two quarters. In the fourth quarter of the last fiscal year, it topped the mark by 3 cents, and in the third quarter of the last fiscal year, it was ahead by 6 cents.

Looking Forward: The outlook for the company’s results in the upcoming quarter is unfavorable. The average estimate for the second quarter is $1.03 per share, down from $1.05 ninety days ago. The average estimate for the fiscal year is $4.27 per share, down from $4.30 ninety days ago.

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).

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com