CHICAGO (Reuters) - Medical products maker Covidien Ltd. reported higher-than-expected quarterly earnings yesterday, helped by strong sales of a generic version of painkiller OxyContin.

The Bermuda-based company's shares, which had sold off heading into the earnings release, rose nearly six percent.

Growth in Covidien's medical devices, supplies and pharmaceuticals businesses offset weakness in the imaging solutions unit due to supply constraints, analysts said.

Last month Covidien announced its intention to move its domicile from Bermuda to Ireland.

"Overall it was a very positive quarter that should convince investors that the majority of Covidien's businesses are recession-resistant," said Morningstar analyst Alex Morozov.

The company, which was spun off from Tyco International in mid-2007, said net earnings from continuing operations were $373 million, or 74 cents a share, in the first quarter ended on December 26, compared with $445 million, or 89 cents a share, a year earlier.

Excluding one-time items, Covidien said earnings rose to 76 cents per share from 59 cents.

The average forecast on Wall Street was for a profit of 70 cents per share, according to Reuters Estimates.

First-quarter net sales rose six percent to $2.5 billion, led by pharmaceutical products and medical devices. Unfavourable foreign exchange translations reduced the quarterly sales growth rate by about four percentage points, Covidien said.

Sales of medical devices, the company's biggest segment, rose three percent to $1.63 billion on strength in laparoscopic surgical instruments, vessel-sealing instruments and hernia-repair products. Sales of imaging products fell nine percent to $265 million, hurt by weakness in radiopharmaceuticals and contrast agents.

"Our imaging segment again posted disappointing results ... and we are executing on our plan to improve its performance going forward," chief executive Richard Meelia said.

Pharmaceutical product sales rose 50 percent to $331 million due to strong demand for oxycodone hydrochloride extended-release tablets, a generic form of prescription painkiller OxyContin launched in September.

Sales of medical supplies grew eight percent to $235 million on higher sales of nursing care products.

Covidien affirmed its fiscal 2009 outlook for net sales to be flat to up three percent. It estimated sales of generic OxyContin would be about $350 million, with the vast majority coming in the first half of the fiscal year.

Shares of Covidien, which have lost a third of their value since September, were up $2.09, or six percent, at $37.06 in afternoon New York Stock Exchange trade.