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Covidien Opens Innovation Center in Turkey

Zacks Equity Research

Covidien plc (COV) revealed that the company has expanded its training and research capabilities in emerging markets by opening Covidien Center of Innovation in Istanbul, Turkey. The innovation center includes state-of-the-art surgical suites, a research and development lab, and an auditorium with seating capacity for 117 people.

This is the fourth training center opened by Covidien in an emerging market. Previously, the company has opened innovation centers in Shanghai, China; Mumbai, India; and Osong, South Korea. The company now plans to open a center in São Paulo, Brazil in this year.

The Covidien Center of Innovation Turkey will provide training to clinicians in Turkey and the surrounding region on advanced procedures and techniques using the latest Covidien technology. It will have the capacity to train more than 5,000 health care professionals.

The center will raise awareness and train clinicians to use Covidien’s solutions for treating diseases such as vascular disease, metabolic disorders (obesity and Type II diabetes), and COPD (Chronic Obstructive Pulmonary Disease).

Covidien is operating in Turkey since 2001 and the market has been growing since then. Currently, the company employs 200 people in the country.

Covidien posted a 3.2% rise in fiscal 2014-second quarter adjusted earnings per share to 96 cents from 93 cents a year ago, beating the Zacks Consensus Estimate by a penny. The marginal rise in earnings was attributable to adverse impacts from foreign exchange movements and the medical device excise tax. Net earnings, however, fell 2.2% to $435 million from $445 million due to decrease in weighted average shares outstanding.

Total revenues in the first quarter grew 2.7% to $2,598 million, missing the Zacks Consensus Estimate of $2,610 million. On a geographic basis, revenues in the U.S. market increased 1.6% to $1,277 million. On the other hand, revenues from non-U.S. developed markets rose 1.8% to $938 million and from emerging markets went up 8.8% to $383 million.

Covidien reiterated its revenues outlook for fiscal 2014. Previously, Covidien had revealed that it expects revenues to grow 2–5% year over year at constant exchange rate (:CER) for fiscal 2014.
Covidien currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the medical products industry include Enzymotec Ltd. (ENZY), INSYS Therapeutics, Inc. (INSY), and Mead Johnson Nutrition Co. (MJN). All these stocks carry a Zacks Rank #2 (Buy).

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