) reported second quarter earnings of $1.23 per share, a couple of
cents above the Zacks Consensus Estimate of $1.21 and 9.8% above
the year-earlier earnings. Including one-time items, second quarter
earnings declined 12.2% to $1.08 per share.
Second quarter revenues increased 2.0% to $9.81 billion, just
shy of the Zacks Consensus Estimate of $9.83 billion. Foreign
exchange fluctuations negatively impacted sales by 4.7%.
The Quarter in Detail
Several of the business categories reported growth during the
quarter despite the negative impact of currency fluctuation.
Proprietary Pharmaceutical sales were $4.4 billion, up 4.9%. Humira
was a major contributor with sales coming in at $2.3 billion, up
16.5%. Humira recorded sales growth in both the US (27.9%) and
international markets (8.4%) during the quarter.
Abbott Labs is looking to get Humira approved for additional
indications which would help drive growth further. The company
gained EU approval for Humira for ulcerative colitis and received a
positive recommendation in the EU for the use of Humira in patients
with non-radiographic axial spondyloarthritis. Abbott Labs is
currently evaluating Humira's safety and efficacy in adult patients
with moderate to severe hidradenitis suppurativa (HS).
Androgel and Creon also contributed to Proprietary
Pharmaceutical sales growth.
The Nutritionals business grew 6.3% to $1.6 billion. Nutrition
sales in the US increased 13.1% to $741 million. The company said
that Similac continued to gain share in the US. Outside the US,
Nutrition sales grew 1.0% to $843 million. The pediatric and adult
segments of the ex-US markets continued to grow.
Other areas that witnessed growth include the Core Laboratory
Diagnostics, Molecular Diagnostics, and Point of Care Diagnostics
businesses. Established Pharmaceuticals sales, however, continued
to decline with sales coming in at $1.2 billion, down 6.0%.
2012 Outlook Maintained
Abbott Labs maintained its earnings guidance for 2012. The
company expects 2012 earnings in the range of $5.00 to $5.10 per
share. The Zacks Consensus Estimate currently stands at $5.05 per
share, the mid-point of the guidance range.
Abbott Labs provided an update on its intention to split into
two separate publicly traded companies: the company said that it
expects to complete the separation by year end. While one company
will deal in diversified medical products, the other (AbbVie) will
focus on research-based pharmaceuticals.
The company also declared a quarterly dividend of 51 cents per
Abbott Labs also provided an update on its pipeline. The company
currently has 20 candidates in phase II/phase III development. The
acquisition of Facet Biotech has helped strengthen Abbott Labs'
early- and mid-stage oncology portfolio.
Abbott Labs is also working on strengthening its neuroscience
portfolio and has several candidates in different stages of
development for the treatment of diseases like schizophrenia, pain,
Parkinson's, Alzheimer's and multiple sclerosis. Abbott Labs, along
), is evaluating daclizumab in a phase III study for the treatment
of relapsing-remitting multiple sclerosis (RRMS).
Abbott Labs is also working on levodopa-carbidopa intestinal gel
(LCIG) for advanced Parkinson's disease - positive phase III
results were reported on this candidate recently and Abbott Labs
expects to file for US approval later this year.
Another promising pipeline candidate is bardoxolone, which is in
phase III studies for chronic kidney disease.
We currently have a Neutral recommendation on Abbott Labs, which
carries a Zacks #3 Rank (short-term Hold rating).
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