Covidien Q2 Profit Rises, Beats Estimates

(RTTNews) - Healthcare products company Covidien plc (COV) Friday reported a higher second-quarter profit, on 3 percent growth in sales, as well as a gain on divestiture. Earnings per share beat analysts estimates, while revenues came slightly below view. Looking ahead, the company said it expects to return to double-digit earnings per share growth, possibly as soon as the third quarter.

For the second quarter, the company's net income increased to $441 million or $0.97 per share from $439 million or $0.92 per share in the previous year.

Excluding specified items, earnings per share from continuing operations were $0.96, versus $0.93 per share a year ago.

On average, 22 analysts polled by Thomson Reuters expected the company to report profit per share of $0.95 for the quarter. Analysts' estimates typically exclude special items.

The recent quarter recorded a gain on divestiture, net $111 million recognized in connection with sale of the firm's Confluent biosurgery product line.

Net sales grew 3 percent to $2.60 billion from $2.53 billion a year ago. Analysts expected revenue of $2.61 billion for the quarter.

Surgical Solutions sales increased 4 percent to $1.21 billion. Vascular Therapies sales edged up 1 percent to $409 million. Sales from Respiratory and Patient Care improved 2 percent to $976 million.

Geographically, US sales increased 2 percent, while sales were up 3 percent in non-U.S. Developed Markets Emerging Markets showed a sales growth of 12 percent.

Covidien kept its 2014 guidance intact. In January, the company had reaffirmed that it expected sales increase of 2-5 percent and adjusted operating margin growth of 21.5 to 22.5 percent.

Looking ahead, José Almeida, chairman, president and CEO of the company said, "With the impact of the medical device tax annualized and, at today's rates, the majority of the negative currency impact behind us, we expect the company to return to double-digit EPS growth, possibly as soon as the third quarter."

COV closed Thursday's regular trading at $70.96 on the NYSE.