Medtronic mulls sale of some Covidien assets

With 3 quarters of operations under its belt since the $50 billion acquisition of Covidien, Medtronic (NYSE:MDT) is evaluating whether to sell off some of the Covidien assets, CEO Omar Ishrak told analysts yesterday during a conference call.

Ishrak said Covidien, which Medtronic calls its minimally invasive therapies group, has “a very clear and compelling vision for the future, which is outcomes-based and very aligned with the Medtronic mission.”

The company will take the next 6 months or so to decide if there are any ex-Covidien assets it wants to divest, he said.

“Now we are looking at the entire range of assets that we have within MITG, and kind of assessing that against the strategy,” he said during the call to discuss Medtronic’s fiscal 2nd-quarter earnings. “Next is to look at the breadth of everything else and see what fits and what doesn’t.”

The Fridley, Minn.-based medical device titan beat Q2 expectations as revenues met estimates, prompting it to raise the low end of its profit forecast.

Medtronic posted profits of $520 million, or $1 per share, on sales of $7.06 billion for the 3 months ended Oct. 30. Compared with the same quarter last year, before the company’s $50 billion acquisition of Covidien, that represents a profit slide of -37.2% on sales growth of 61.7%. The minimally invasive therapies business put up about a third of total sales for the just-ended quarter.

Adjusted to exclude 1-time items, profits were up 45.3% to $1.47 billion, or $1.03 per share, 3¢ ahead of the consensus forecast on Wall Street.

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