Covidien Ltd.

Covidien Ltd. (COV - Analyst Report) has been driving its revenue higher from robust sales in its international markets, which all recorded double-digit sales growth in the most recently reported quarterly results. The next-year estimate is bullish, and the company's stock price is in rally mode, hitting a new 52-week and all-time high within the last 3 days.

Covidien Ltd. develops and manufactures healthcare products for home and clinical applications worldwide. The company's four divisions are Medical Devices, Pharmaceutical Products, Imaging Solutions and Medical Supplies. Covidien was incorporated in 2000, has a market cap of $28 billion and is headquartered in Hamilton, Bermuda.

Second-Quarter Results

Covidien stepped up and reported solid second-quarter results on Aug 5, driven by strong growth in three of the company's four primary business segments. Sales were up 14% from last year, to $2.6 billion. When removing one-time items, operating income for the quarter totaled $563 million, compared to $481 million last year. This produced earnings of 72 cents per share, ahead of analyst estimates of 66 cents.

This was the fourth time in the last four quarters that Covidien has surprised and beaten analyst estimates, having done so by an average of 5 cents, or 7.85%.

Strong Segment and International Growth

The company noted that its results were driven by higher sales in three of its four primary business segments, new products and a favorable exchange rate between international currencies. All of Covidien's international regions, including Europe, Japan and Asia-Pacific recorded double-digit sales gains.

The company did not provide guidance or earnings targets during the quarterly announcement, but CEO Richard Meelia said that, "We are on pace to meet our 2008 financial goals."

Analyst Estimates

The analyst community shares the optimistic view. The current-year estimate is up to $2.65 per share from $2.56 per share last month. The next-year estimate is bullish, pegged at $3.07 per share, a 16% earnings growth projection.

The Chart

Shares of COV have been in rally mode for most of 2008, posting consistent gains in the face of a very tough market. More recently, this stock advanced beyond a short-term level of resistance and logged a new 52-week and all-time high at $57. Take a look at the chart below.

Read the full analyst report on COV