Covidien (NYSE:COV) reported strong fiscal 3rd quarter results, with sales of $3 billion in-line with expectations. Importantly, margins and net income beat expectations and the shares should react positively today on the news, particularly given the tough economic environment. Despite being highly acquisition driven, COV reported organic growth for its Med Tech business at 8% vs. the prior year period, making it officially the fastest growing large cap company in the Medical Technology sector. Meanwhile, COV trades at about a 13% discount to competitors like Baxter and Becton Dickinson, and a 26% discount to CR Bard. The company left its annual guidance unchanged, despite some foreign exchange headwinds, which is upside relative to expectations given the lowered outlooks seen across the large cap Med Tech sector. The pharmaceutical division continues to be a drag on margins and earnings, and the planned spinout of this business unit next year should unlock value on margin expansion and more robust growth. Expect shares to be strong on the open and throughout the day.