Covidien Conference Call Highlights

Covidien plc COV reported its fourth quarter earnings on Wednesday. Shares of the company are down 1 percent.

Below are some key highlights from its conference call.

• We had an outstanding fourth quarter, posting results that exceeded our expectations.
• Sales were up 7%, both operationally and as reported, and up 8% in the medical devices segment.
• We were very pleased with our performance in developed markets, particularly in the United States where we achieved 6% sales growth; and in Australia, where we registered double-digit sales gain.
• In addition, as expected, the sales growth rate in Japan improved from the prior quarter.
• In emerging markets, we once again posted double digit operational sales growth, reflected in the investments we have made over the past few years.
• This performance reflected strength in the BRIC countries, particularly Russia.
• We plan to continue to invest in these countries, as we still believe they offer good opportunities for growth.

Segments:

• Surgical sales were up 18%, aided by sales growth in the mid-teens for vessel sealing.
• This represents the 36th consecutive quarter of double-digit sales gains for vessel sealing.
• New product launches, including LigaSure Impact and Blunt Tip continued to contribute to our market share gain in this category.
• We also continue to gain market share in our stapling franchise, particularly in endomechanical stapling.
• Our significant growth this quarter was driven by demand for Tri-Staple Reloads as we continued to benefit from procedures, shifting from open to minimally invasive surgery.
• Our results were also aided by the launch of Reinforced Reload earlier this year, which integrates a proprietary buttress material with Tri-Staple.
• We were also very pleased with our results in the hernia category.
• We once again posted double-digit increase in synthetic mesh, which was aided by the launch of our Symbotex composite mesh earlier this year.
• We continue to make targeted investments in this space to bolster our portfolio.
• Most recently, we launched our ReliaTack fixation device.
• In addition, Given Imaging delivered results that exceeded our expectations.
• Finally, Interventional Lung delivered the best quarterly results yet, restoring growth in excess of 50%.
• Both of these strategic bets are paying off.
• Within General Surgical, we benefited from the acquisitions of New Wave and WEM in Brazil.
• However, the continued impact of our current-year divestiture of Confluent biosurgery and a modest decrease in sales of surgical instruments result in General Surgical sales that were about level with the prior year.
• Moving to Vascular Therapies, Neurovascular sales were 7% above those of the prior year.
• Our Peripheral Vascular recorded modest growth during the quarter.
• In Neurovascular, we saw significant sales gains in both Solitaire and access delivery products.
• During the quarter, we re-entered the market with our Pipeline Embolization and Alligator Retrieval Devices.
• The timely resolution of the recall of these products served to minimize the impact on our results.
• In addition, the Pipeline Flex, launched in Europe last quarter, continued to perform well.
• While we are glad that Neurovascular is back on track and has returned to market growth rates, we believe our strong and new product pipeline will drive further growth going forward.