Abbott Labs Swings to Loss After Booking Charge on Mylan Stake--Update

By Anne Steele 

Abbott Laboratories swung to a loss in the most recent quarter as it booked a $947 million charge related to the stock-price drop of embattled EpiPen maker Mylan NV, in which it owns a stake.

Shares declined 1.6% in early trading to $40.53.

Still, adjusted profit and revenue topped expectations and the company narrowed -- and raised at the midpoint -- its 2016 adjusted earnings view to $2.19 to $2.21 a share, from a previous range of $2.14 to $2.24.

Chief Executive Miles White cited strong performance in established pharmaceuticals and medical devices sales, which rose 5.3% and 6.4%, respectively. However, sales slipped 2% in Abbott's nutrition segment, the company's largest.

In all for the September quarter, Abbott reported a loss of $329 million, or 22 cents a share, compared with a year-earlier profit of $580 million, or 38 cents a share, a year earlier.

The period this year included a 66-cent charge associated with Abbott's position in Mylan to reflect Mylan's share price as of Sept. 30. Mylan's stock has stumbled since this summer amid popular outrage about higher drug costs and an investigation into the company's substantial price increases for the EpiPen emergency allergy treatment.

Abbott owned a 13% stake in Mylan -- nearly 70 million shares -- as of January, according to a company filing.

Excluding certain items, Abbott said adjusted per-share earnings climbed to 59 cents in the latest period from 54 cents. Sales rose 3% to $5.3 billion. Operational revenue, which factors out currency changes, rose 4%. Analysts polled by Thomson Reuters had forecast adjusted per-share earnings of 58 cents on revenue of $5.29 billion.

In April, Abbott agreed to buy St. Jude Medical Inc. for $25 billion amid consolidation in the health-care sector. Companies are responding to cost pressures by beefing up, increasing their negotiating leverage and pricing power. St. Jude and Abbott have said they expect the merger to close in the fourth quarter.

St. Jude Medical on Wednesday said its third-quarter revenue rose, led by a 13% sales increase abroad, though profit edged lower.

Write to Anne Steele at [e-mail]

(END) Dow Jones Newswires

October 19, 2016 10:08 ET (14:08 GMT)

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