Golf Clap for Covidien

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Covidien (NYS: COV) reported earnings on July 26. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 29 (Q3), Covidien met expectations on revenues and met expectations on earnings per share.

Compared to the prior-year quarter, revenue improved slightly and GAAP earnings per share dropped.


Gross margins improved, operating margins contracted, net margins dropped.

Revenue details
Covidien logged revenue of $3.01 billion. The 17 analysts polled by S&P Capital IQ hoped for sales of $3.01 billion on the same basis. GAAP reported sales were 2.8% higher than the prior-year quarter's $2.93 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $1.07. The 20 earnings estimates compiled by S&P Capital IQ predicted $1.06 per share. GAAP EPS of $0.93 for Q3 were 13% lower than the prior-year quarter's $1.07 per share. (The prior-year quarter included $0.01 per share in earnings from discontinued operations.)

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 57.8%, 70 basis points better than the prior-year quarter. Operating margin was 21.4%, 70 basis points worse than the prior-year quarter. Net margin was 15.1%, 320 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $3.02 billion. On the bottom line, the average EPS estimate is $1.06.

Next year's average estimate for revenue is $11.88 billion. The average EPS estimate is $4.29.

Investor sentiment

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Covidien is buy, with an average price target of $63.22.

The article Golf Clap for Covidien originally appeared on Fool.com.

Seth Jaysonhad no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend Covidien Ltd. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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