Abbott Results, Helped by Product Launches, Top Views

By Joshua Jamerson 

Abbott Laboratories Inc., in the middle of its tie-up with St. Jude Medical Inc., said Wednesday that earnings declined 22% from a year earlier amid higher expenses.

However, adjusted profit beat analysts expectations by 2 cents and revenue climbed, helped by recent product launches. Shares rose 2.3% to $42.78 in recent afternoon trading.

Abbott's Absorb dissolving heart stent was approved by the U.S. Food and Drug Administration earlier this month. Chairman and Chief Executive Miles D. White said recent approvals and launches such as Symfony, its intraocular lenses for the treatment of cataracts, and Absorb are contributing to growth.

For the quarter ended in June, sales rose 1.4% in Abbott's nutrition segment, the company's largest. Recently launched infant and toddler GMO-free baby food and formula and strong performance in several countries in Latin America and Asia drove a 4.3% increase on an operational basis.

Overall sales rose 3.2% while operational revenue, which factors out currency changes, increased 6.4%.

In Abbott's diagnostics segment, revenue climbed 4.1% to $1.23 billion, or a 6% increase in operational revenue, as sales rose in its core laboratory, molecular and point of care divisions. Established pharmaceuticals sales edged up 0.4%, or 9.5% on operational basis, while sales in medical devices rose 6.4%, or 6.8% excluding unfavorable foreign exchange.

Abbott posted a profit of $615 million, or 41 cents a share, down from $784 million, or 52 cents a share, a year earlier. The year-ago quarter included a gain on a portion of Abbott's position in Mylan Inc. Excluding items such as expenses associated with acquisitions, earnings per share were 55 cents in the latest period.

Net sales rose $5.33 billion from $5.17 billion a year ago. Analysts surveyed by Thomson Reuters forecast adjusted per-share earnings of 53 cents on revenue of $5.24 billion.

St. Jude Medical on Wednesday said strong demand boosted revenue 11% in its latest quarter. In April, Abbott agreed to buy St. Jude for $25 billion amid a flurry of transactions 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.

Abbott's operating costs and expenses climbed 1.7% to $4.52 billion in the period.

For the year, Abbott backed its adjusted earnings guidance of $2.14 to $2.24.

Write to Joshua Jamerson at [e-mail]

(END) Dow Jones Newswires

July 20, 2016 15:21 ET (19:21 GMT)

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