Covidien ($COV) ticked up its net sales by 5% in the first quarter of fiscal 2013, raking in $3.1 billion, but costs related to the planned spinout of its drug unit dragged net income down 0.2% from the same period last year.
The devicemaker still managed $493 million in profit on the quarter, and Covidien is heartened by the strong sales start, raising its 2013 revenue growth projection to between 5% and 8%. The company had earlier predicted a 3% to 6% sales increase.
Covidien will wave away its pharmaceutical business in the middle of the year, the company said, but not before profiting off the recent FDA approval of Concerta, a generic ADHD drug.
And Covidien is confident it can stay successful with just its medical device unit, which posted $2.1 billion in sales last quarter, an 8% jump over the prior year. Endomechanical devices, the company's largest unit, grew 7% to $620 million, while Covidien's oximetry and monitoring business spiked 16% to $241 million thanks largely to June's $310 million buyout of Oridion Systems.
The company is also planning to scale up its R&D spending this year, CEO José Almeida said, looking to cash in on drug-coated balloons for peripheral artery disease and the booming market for renal denervation.
"We remain confident that our robust pipeline of new products, sizable expansion opportunities in emerging markets and recent promising portfolio additions will enable us to meet the significant challenges of the global marketplace and to continue to deliver good operational growth," Almeida said in a statement.
- check out Covidien's results