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Covidien Management Discusses Q3 2012 Results - Earnings Call Transcript

Before I go into more detail on our third quarter results, I'd like to spend a moment discussing the overall health care products marketplace. In the U.S., we have not seen any significant change in volumes, procedures or utilization in the last few months. Volumes remained depressed, largely due to continued high levels of unemployment and delays in elective procedures.

In Europe, austerity programs and the economic slowdown continue to pressure all of med tech.

Emerging markets are growing rapidly and we expect this to continue as access to health care expense, and the demographic trends are favorable.

Our results this quarter showed the positive impact of our broad portfolio and global leverage. In the U.S., sales grew 6%, driven by very strong 9% increase in the -- for Medical Devices. In Japan, we delivered double-digit growth with good gains in Energy, Vascular and Stapling products. We also reached solid products in other developed markets including Canada and Australia. In our emerging markets comprising Eastern Europe, Middle East and Africa, Asia and Latin America, sales again grew at a double-digit pace with broad-based gains led by Endomechanical, Soft Tissue Repair and Energy products. We registered exceptional growth in the BRIC countries, led by China and Brazil, where we will continue to make incremental investments to accelerate growth and expand our product offerings.

This positive progress was partially offset by somewhat slower growth in our European business, which was up in the low single digits operationally this quarter. Across the business, we saw a significant slowdown in Spain, the sales grew in many other markets despite the difficult conditions. We believe we have the right mix of products and technologies to be successful in the European marketplace.

As now I get into my comments on individual product categories, I would discuss our growth on an operational basis excluding the negative impact of foreign currency. I'm doing this because I believe they provide of a better picture of our progress.

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