Covidien (COV) recently summarized the impact of the disaster in Japan on its operations in that country. The company stated that its almost 1,500-strong Japan-based workforce is not in danger. Its office in Tokyo is open to business, its plant in Shizuoka is operational and its distribution centers are unharmed. Covidien derived approximately 8% of its revenues in fiscal 2010 from sales in Japan.
The company is working in tandem with humanitarian and relief organizations to support the aid process underway. It will donate not less than $1 million for the Japanese people.
Covidien is a leading global healthcare products company that develops and markets medical solutions for better patient outcomes. The company’s core medical devices business faces stiff competition from the likes of Johnson & Johnson (JNJ), Becton Dickinson (BDX) and C.R. Bard (BCR).
Covidien boasts of 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, bolstered Covidien’s foothold in the peripheral vascular and neurovascular markets. Moreover, the divestiture of its specialty chemicals and sleep therapy product line enabled Covidien to rationalize its product portfolio and reallocate resources to faster-growing, higher-margined businesses.
In January 2011, Covidien announced a favorable royalty agreement with Masimo Corporation (MASI) for its sales of pulse oximetry equipment. It is expected to provide some financial benefit going forward as well as allow Covidien more operational freedom. If Covidien adds hemoglobin monitoring to its platform of products, then the royalty rate will necessarily increase.
On the somewhat somber side, Covidien’s Pharmaceuticals business remains challenged by aggressive competition and heightened generic pressure. Moreover, its hernia repair franchise has challenges ahead as C.R. Bard continues to strengthen its foothold in this market with new products.
BARD C R INC (BCR): Free Stock Analysis Report
BECTON DICKINSO (BDX): Free Stock Analysis Report
COVIDIEN PLC (COV): Free Stock Analysis Report
JOHNSON & JOHNS (JNJ): Free Stock Analysis Report
MASIMO CORP (MASI): Free Stock Analysis Report
Zacks Investment Research
