Tyco Healthcare has officially become Covidien, one of the largest diversified healthcare companies in the world and begins trading today on the NYSE as COV.
Nellcor Puritan Bennett is now the Respiratory and Monitoring Solutions Global Business Unit of Covidien, offering a full range of products to monitor, diagnose, and treat respiratory disease and sleep disorders.
Covidien, which had 2006 revenue of $10 billion, also plans to spend more on research and development. Michael Jaffe, an analyst at Standard & Poor’s, said increased R&D spending is "a positive in the long-run" for the company, which critics said the company failed to do enough of when it was known as Tyco Healthcare.
Wall Street will be watching Covidien closely to see if the increase in research spending hurts short-term earnings. Covidien, as a Tyco unit, has also had "problem spots" in the past, such as voluntary recalls of some of its products, Jaffe said.
Jon C. Ogg of 24/7 Wall St., a financial news and opinion firm, said Covidien should perform better now that it’s out from under Tyco’s wing, but cautioned against expectations of dramatic growth in an industry that had declined over the years.
