Irish healthcare products company Covidien plc (COV) Friday revised its sales outlook for fiscal year 2013 to reflect the planned spin-off of its pharmaceuticals business.
Covidien now estimates that net sales in fiscal 2013 will be up 4 to 5 percent, including foreign exchange at current rates. In January, the company estimated net net sales to grow 5 to 8 percent.
The company expects sales to grow 4 to 6 percent in the Medical Devices segment and up 1 percent in the Medical Supplies segment. Operating margin, excluding the impact of one-time items, is expected to be in the range of 22 to 22.5 percent.
"Our revised sales guidance, excluding the Pharmaceuticals business, reflects our year-to-date performance and current foreign exchange rates," said Chief Financial Officer Charles Dockendorff.
"Once we have annualized the impact of the medical device tax and unfavorable foreign exchange, we are confident that Covidien will deliver improved top-line performance and accelerate earnings growth in fiscal 2014," added Dockendorff.
Covidien also provided fiscal 2013 guidance for its pharmaceuticals unit, Mallinckrodt plc, which prepares to spin off from the company to become a separate, publicly traded entity.
Net sales at Mallinckrodt in fiscal 2013 are expected to grow 7 to 11 percent from 2012, assuming foreign exchange rate at current levels.
Net sales are expected to be up 21 to 25 percent in Mallinckrodt's Specialty Pharmaceuticals segment and to decline 3 to 7 percent in its Global Medical Imaging segment.
Capital expenditures at the unit are expected to be $140 million to $160 million in fiscal 2013.
The fiscal year for Mallinckrodt will end on September 27, 2013.
Meanwhile, Covidien said the spin off of Mallinckrodt will occur following the close of trading on June 28.
Additionally, Covidien has adjusted its financial statements for fiscal years 2010 to 2012 and the first quarter of 2013 to reflect the upcoming discontinued operations arising from the spin off.
Adjusted financial statements for the second quarter of 2013 will be available by the end of May, the company said.
"As we approach our anticipated spin off, we are building on a strong foundation and are well positioned for long-term growth," said Mark Trudeau, who will serve as CEO of Mallinckrodt.
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