NEW YORK (Bloomberg) — Covidien, the maker of medical supplies spun off from Tyco International, said fiscal fourth-quarter profit fell 90 percent after raw material and energy costs prompted asset writedowns.

Net income dropped to $34 million, or seven cents a share, in the three months ended September 28, from $340 million, or 69 cents, a year earlier, the Bermuda-based company said in a statement yesterday. Sales rose 4.8 percent to $2.6 billion from $2.48 billion.

Covidien, formerly part of Tyco, the manufacturing and services company built by now-jailed former Chief Executive Officer L. Dennis Kozlowski, has fallen 16 percent since it began trading on the New York Stock Exchange on June 15.

Covidien was neglected before the Tyco spinoff and now has more opportunity for growth, wrote Kristin Stewart of Credit Suisse in New York in a November 6 note to clients.

"Health-care spinoffs have generally outperformed their parents and the market," Stewart wrote. "We see the potential for the company to become more competitive."

The company reiterated its 2008 sales growth forecast of four to six percent, assuming current foreign exchange rates on the dollar.

The company booked $290 million in charges, reducing the book value of businesses such as diapers for which energy and material costs have risen, and discontinuing a trademark from its imaging solutions unit, spokesman Eric Kraus said via telephone. The write-downs were first announced in October and November.

Covidien also booked $32 million in restructuring charges, primarily from moving a medical unit to Colorado from California, Kraus said.