(By Balachander) Covidien Plc (NYSE: COV) posted better-than-expected quarterly earnings helped by strong sales growth at its medical devices segment and the Ireland-based developer of healthcare products lifted its outlook for 2013.
Excluding items, earnings per share declined 2.7 percent to $1.10, beating Wall Street projections of $1.06.
Net earnings were nearly flat at $493 million for the first quarter.
Sales increased 5.5 percent to $3.06 billion, better than consensus estimate of a growth of 3.40 percent. Medical devices sales increased 8 percent, while pharmaceuticals sales were flat. Medical supplies sales grew 2 percent.
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Covidien said it continued to generate above-market growth in a number of key categories at its medical devices segment, including stapling, energy, airway and ventilation.
Gross margin shrank 1.2 percentage points to 57.5 percent. Non-GAAP declined 1.3 percentage points to 57.5 percent.
Selling, general and administrative expenses increased 3.7 percent and Research and development expenses also rose 3.5 percent.
Looking ahead for the full year, the company now forecasts net sales growth between 5 percent and 8 percent versus 3 percent to 6 percent rise projected earlier, while analysts expect an increase of 4.70 percent.
COV shares, which have been trading in the 52-week range of $48.22 to $61.69, ended at $61.67 on Thursday.