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Covidien Ltd. Reports Operating Results (10-K)

November 15, 2012 | About:

Covidien Ltd. (COV) filed Annual Report for the period ended 2012-09-28.

Covidien Plc has a market cap of $26.69 billion; its shares were traded at around $55.65 with a P/E ratio of 13 and P/S ratio of 2.3. The dividend yield of Covidien Plc stocks is 1.9%. Covidien Plc had an annual average earning growth of 3.9% over the past 5 years.

Highlight of Business Operations:

Net sales generated by our businesses in the United States were $6.572 billion, $6.331 billion and $5.725 billion in fiscal 2012, 2011 and 2010, respectively. Our non-U.S. businesses generated net sales of $5.280 billion, $5.243 billion and $4.704 billion in fiscal 2012, 2011 and 2010, respectively. Our businesses outside the United States represented approximately 45% of our net sales in each of fiscal 2012, 2011 and 2010.

Sales to external customers are reflected in the regions based on the reporting entity that records the transaction. U.S. sales include sales of neurovascular and peripheral products exported to customers outside the United States and invoiced in multiple currencies of approximately $302 million, $281 million and $206 million for fiscal 2012, 2011 and 2010, respectively. Accordingly, these U.S. sales are subject to the effects of changes in foreign currency exchange rates.

Net sales for fiscal 2011 increased $1.114 billion, or 17%, to $7.829 billion, compared with $6.715 billion for fiscal 2010. Favorable currency exchange rate fluctuations positively impacted net sales for the segment by $235 million. The remaining increase in net sales for the segment was driven by increased sales of Vascular Products, Energy Devices, Endomechanical Instruments and Oximetry & Monitoring Products. The increase in Vascular Products sales was primarily due to the acquisition of ev3, which resulted in an additional $542 million in net sales for the segment. The increase in net sales for Energy Devices and Endomechanical Instruments primarily resulted from higher sales volume of vessel sealing products and stapling devices, respectively, largely attributable to sales of new products. Finally, the increase in sales for Oximetry & Monitoring Products was driven by higher sales volume of sensors primarily resulting from the prior year acquisition of Somanetics Corporation. These increases in net sales were somewhat offset by a decrease in sales of Airway & Ventilation Products resulting from strong sales in the prior year due to the H1N1 pandemic. Net sales for fiscal 2011 also benefited from the extra selling week in the fourth quarter, which impacted all product groups.

Net sales to customers in Spain, Italy and Portugal totaled $645 million, $732 million and $690 million for fiscal 2012, 2011 and 2010, respectively. At the end of June 2012, we collected $248 million from the Spanish government, which related to 2011 and prior invoices. As of September 28, 2012, $28 million of the accounts receivable, net in Spain, Italy and Portugal were over 365 days past due.

significant and we do not expect significant revisions of these estimates in the future. Rebates charged against gross sales in fiscal 2012, 2011 and 2010 amounted to $3.436 billion, $3.409 billion, and $3.149 billion, respectively.

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