For Immediate Release
Chicago, IL – November 11, 2010 – Zacks.com Analyst Blog features: Covidien plc (COV), Johnson & Johnson (JNJ), Becton Dickinson (BDX), C.R. Bard (BCR) and Atmel Corporation (ATML).
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Here are highlights from Wednesday's Analyst Blog:
Covidien Tops, Profits Skyrocket
Ireland-based health care product maker Covidien plc (COV) reported fourth-quarter fiscal 2010 (ended September 24) adjusted earnings per share of 84 cents, exceeding the Zacks Consensus Estimate of 74 cents and the year-ago earnings of 71 cents.
For fiscal 2010, adjusted earnings of $3.38 per share outshone the Zacks Consensus Estimate of $3.28 and were above the corresponding year-ago figure of $2.78. Adjusted earnings exclude one-time items such as acquisition and restructuring charges, loss on divestitures and tax-related adjustments.
Net income for the quarter was $443 million (or 89 cents a share), representing a staggering eightfold annualized growth. Profits were boosted by higher sales of medical devices. Moreover, the year-ago profit (of $56 million) was hit by hefty tax expenses. For fiscal 2010, net income rocketed 80% year over year to $1.63 billion (or $3.24 a share).
Revenues
Net sales for the quarter rose 3% year over year to $2,670 million, also beating the Zacks Consensus Estimate of $2,638 million. Higher revenues from the Medical Devices business were masked by the sustained decline in the Pharmaceuticals division. Revenues for fiscal 2010 edged up 2% year over year to $10.43 billion, in line with the Zacks Consensus Estimate.
Outlook
Covidien has not provided any updated guidance for fiscal 2011. In September 2010, the company stated that it envisions net sales for the year to budge up 6% to 9% year over year.
The company anticipates revenues from Medical Devices to leap 10% to 13% year over year in fiscal 2011. Revenues from the Medical Supplies unit are expected to be stable to up 3%. However, Covidien foresees sales from its Pharmaceuticals division to decline 5% in fiscal 2011.
Adjusted operating margin for fiscal 2011 has been projected in the range of 21% to 22%. The effective tax rate is expected between 20% and 21% while free cash flow is forecasted to exceed $1.6 billion.
Covidien is a leading global health care products company that develops and markets medical solutions for better patient outcome. The company's core medical devices business faces stiff competition from Johnson & Johnson (JNJ), Becton Dickinson (BDX) and C.R. Bard (BCR).
Covidien boasts a well diversified product and technology portfolio. The company remains committed to rolling out new products and technologies, focusing on fast-growing markets, and boosting market share in core segments through investments in sales and marketing infrastructure.
The acquisition of ev3 in July 2010 has bolstered Covidien's foothold in the peripheral vascular and neurovascular markets.Moreover, the divestiture of its specialty chemicals and sleep therapy product line has enabled Covidien to rationalize its product portfolio and reallocate resources to faster-growing, higher-margin businesses.
Atmel Reports Solid Quarter
Atmel Corporation (ATML) reported a net income of $219.8 million or 47 cents in the third quarter of 2010 compared to a net income of $36.4 million or 8 cents per share in the previous quarter and a net loss of $36 million or 8 cents per share in the year-ago quarter.
Excluding one-time items but including stock-based compensation expense, net income came in at 16 cents per share, easily beating the Zacks Consensus Estimate of 12 cents.
Revenues came in at $444.3 million in the quarter, up 13% sequentially and up 40% from the year-ago quarter. This beat management's expectation of 6%-10% growth on a sequential basis.
Based in San Jose, CA, Atmel designs, develops, manufactures and sells integrated circuit products. The company operates in four segments: Application-Specific Integrated Circuit (ASIC), Microcontrollers, Nonvolatile Memory, Radio Frequency (RF) and Automotives.
On a segment basis, revenues from the Microcontroller business unit - accounting for approximately 57% of total revenues - grew 29% sequentially and 113% year over year to $256 million. The improvement was driven by a solid growth in 8-bit and 32-bit microcontrollers. Atmel saw strength across a broad cross-section of end markets, particularly the consumer and industrial markets.
Atmel experienced rapid growth in areas such as capacitive touch, smart meters, battery powered applications, home and building automation markets, point-of-sale terminals and many other consumer and industrial applications which use the 8-bit and 32-bit microcontrollers. Atmel's leading touch screen solution – maxTouch - recorded strong growth, primarily driven by four largest smartphone customers.
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