Covidien PLC's fiscal first quarter earnings slipped as a rise in expenses and a tax hike countered gains from medical device sales, but the performance topped Wall Street expectations.
The Irish drug and medical device maker earned $493 million, or $1.03 per share, in the three months that ended Dec. 28. That compares to $494 million, or $1.02 per share, in the last quarter of 2011, when the company had more shares outstanding.
Excluding restructuring charges and other costs, adjusted earnings totaled $1.10 per share.
Revenue climbed 5.4 percent to $3.06 billion from $2.9 billion a year ago.
Analysts surveyed by FactSet expected, on average, earnings of $1.06 per share on $3 billion in revenue.
Medical device revenue climbed 8 percent to $2.13 billion in the quarter, helped by gains in areas such as stapling and suture, mesh and mechanical fixation products. Revenue from its pharmaceutical division, which Covidien is in the process of spinning off, came in largely flat at $489 million.
Covidien said the effect of unfavorable currency exchange rates lowered its revenue by about 1 percentage point. The Dublin company sells its products in more than 140 countries, but it reports results in dollars. That means exchange rates can affect revenue comparisons with previous quarters.
The company's selling, general and administrative expenses climbed 4 percent to $941 million due to acquisition-related costs and a push to grow in emerging markets. Covidien's income tax expense rose 18 percent to $117 million.
Covidien now expects 2013 revenue to climb 5 percent to 8 percent, up from its previous forecast for growth of between 3 percent and 6 percent. The new forecast would amount to sales of about $12.44 billion to $12.8 billion compared to the fiscal 2012 total of $11.85 billion.
Analysts expect, on average, $12.39 billion.
Covidien shares closed at $61.67 on Thursday after hitting a 52-week high of $61.69 earlier in the sesion.