Covidien ($COV) beat analysts' estimates in the second quarter despite a 15% drop in profits, recording a 3% boost in revenue thanks to strong medical device sales.
The company notched device sales of $2.06 billion, a 4% jump over the same period last year, and earned $1.07 per share, which is a penny above the average analyst estimate, Reuters reports.
Driving device growth was a double-digit sales increase for Covidien's line of medical staplers, led by the Tri-Staple tech, and the company recorded boosts in sales for ventilators and neurovascular products, too. Covidien's other two segments, pharmaceuticals and medical supplies, remained mostly flat in the second quarter.
The decrease in profits is due in part to a spike in expenses for Covidien, which is pouring money into its Chinese and Indian operations to expand its market share in those countries. However, the investments have already started to pay off, CEO Jose Almeida said in a statement. "In emerging markets, sales growth was outstanding, reflecting the incremental investments we've made recently to expand our sales force and our marketing efforts in these fast-growing regions," he said.
Despite the sales growth, Covidien has faced a few challenges in Q2. In June, the FDA chided the company for not taking quick enough action to correct problems with one of its stapling techs, and Covidien issued a warning to U.K. regulators this month about possible battery failure in two of its home-use ventilators.
- read the company's release
- here's Reuters' take