Abbott Laboratories top analyst forecasts

By Mary Lee

Abbott Laboratories net income over the past year. Graph created by Mary Lee
Abbott Laboratories net income over the past year.
Graph created by Mary Lee

Abbott Laboratories, helped by growing sales at its nutrition and vision care businesses, reported third quarter earnings that topped forecasts Wednesday.

In the latest quarter, net income at the Abbott Park, Ill.-based maker of health care products declined to $538 million, or 36 cents per diluted share, from $966 million, or 61 cents per diluted share, in the year-ago quarter.

Abbott’s results were skewed by special items, including the sale of its developed markets branded generics pharmaceutical business and the recent $2.9 billion acquisition of CFR Pharmaceuticals. Excluding these special items, adjusted earnings per share advanced 13 percent to 62 cents, from 55 cents a year ago- topping Bloomberg analysts expectations by two pennies.

Revenue, excluding its pending sale of its developed markets branded generics pharmaceutical business to Mylan Inc., increased 5.8 percent to $5.1 billion from $4.83 billion, the same quarter last year.

“We reported another quarter of sequential sales growth, including improved performance in our branded generics pharmaceuticals and nutrition businesses,” Miles D. White, Abbott chairman and chief executive officer said in a press release.

Under a transaction announced July 14, Abbot plans to divest its developed markets branded generics business to Mylan  in a $5.3 billion deal that will leave Abbott with a 21 percent stake in the new entity.

Abbott on Wednesday narrowed its earnings-per-share guidance, excluding special items, to a range of $2.25 to $2.27, fine-tuning its view from a previous forecast of $2.19 to $2.29 a share for the full year ending Dec. 31.

“We view the result and updated guidance as encouraging and we expect ABT to see an acceleration in top line growth as the year progresses,” Matthew Taylor, a Barclays Capital Inc. analyst, told investors in a research note.

The global healthcare giant’s portfolio has four sectors comprising nutrition, diagnostics, established pharmaceuticals and medical devices.

The nutrition sector, helped by leading infant formula products such as Similac and Eleva and adult nutrition products, such as Ensure, saw sales climb 9.3 percent to $1.89 billion.

At Abbott’s diagnostics group, sales advanced 4.9 percent to $1.18 billion in the third quarter, as the company continues to invest in the development of several next-generation diagnostic platforms. Officials said they expect to see continued strong growth in emerging markets.

Established pharmaceutical sales expanded 11.5 percent to $771 million, reflecting the company’s sale of its developed markets branded generics pharmaceuticals business to Mylan.

Medical devices sales dipped 1 percent to $1.33 billion in the third quarter, influenced by a decline in sales of what are known as “drug-eluting stents.”

In late-afternoon New York Stock Exchange trading Wednesday, Abbott shares were down 77 cents, or 1.8 percent, at $41.62.