DUBLIN, Ireland (TheStreet) -- Covidien (COV) shares jumped several points amid heavy trading Tuesday morning after the medical supplies maker beat quarterly expectations and reaffirmed its 2011 revenue guidance.
Covidien said strengthened demand for its medical devices helped drive results. A lower tax rate, less restructuring-related costs and strong sales of the company's vascular devices and patient monitoring products also helped the company's improved performance in the recent quarter.
Covidien booked a 3.6% increase in quarterly net profits to $427 million, or 86 cents per share, up from year-earlier earnings of $412 million, or 82 cents per share.Revenue increased 5% to $2.77 billion, from $2.64 billion. Excluding one-time gains related to inventory and restructuring charges, Covidien said it earned 95 cents per share from continuing operations, up from 84 cents per share in the first fiscal quarter last year. Top- and bottom-line results beat analysts' consensus call for earnings of $403.1 million, or 81 cents per share, on revenue of $2.73 billion. Analysts typically exclude one-time items when forecasting estimates. "Solid medical device sales results likely helped by continued strong performance of recent acquisitions more than offset some softness in the medical supplies business," noted Leerink Swann analyst Rick Wise. Deutsche Bank analysts noted that results at Covidien's medical devices and pharmaceutical units were "very good," and the firm was "not concerned" about weakened performance at its medical supplies division.
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