Abbott Labs
(
ABT
) reported fourth quarter earnings of $1.45 per share, a penny
above the Zacks Consensus Estimate and at the higher end of the
guidance range provided by the company. Fourth quarter earnings
increased 11.5% from the year-earlier period. Including one-time
items, fourth quarter earnings increased 10.9% to $1.02 per
share.
Fourth quarter revenues increased 4.1% to $10.4 billion, just
shy of the Zacks Consensus Estimate of $10.6 billion.
Full year earnings came in at $4.66 per share, a penny above the
Zacks Consensus Estimate and 11.8% above the year-ago earnings.
Full year earnings came in at the higher end of the guidance range
of $4.64 - $4.66 per share. 2011 revenues increased 10.5% to $38.9
billion, just shy of the Zacks Consensus Estimate of $39
billion.
The Quarter in Detail
Almost all the business categories performed well during the
quarter. Proprietary Pharmaceutical sales were $4.8 billion, up
6.7%. Humira was a major contributor with sales coming in at $2.2
billion, up 15.9%. Humira recorded sales growth in both the US
(22.9%) and international markets (9.8%) during the quarter.
Abbott Labs is looking to get Humira approved for additional
indications which would help drive growth further. Lupron,
Androgel, Creon and Synthroid also contributed to Proprietary
Pharmaceutical sales growth.
The Nutritionals business grew 8.6% to $1.6 billion. Nutrition
sales in the US increased 5.8% to $679 million. Outside the US,
Nutrition sales continued to experience double-digit growth with
sales increasing 10.8% to $877 million. Strong performance in
emerging markets helped drive international nutrition sales.
Other areas that witnessed stable growth include the Core
Laboratory Diagnostics, Molecular Diagnostics, Medical Optics,
Diabetes Care and Point of Care Diagnostics businesses. Emerging
Markets sales came in at $2.5 billion, representing almost 25% of
total sales.
Established Pharmaceuticals sales, however, declined 4.6% to
$1.4 billion.
In-Line Outlook for 2012
Along with releasing fourth quarter results, Abbott Labs
provided guidance for 2012. The company expects 2012 earnings in
the range of $4.95 to $5.05 per share. Guidance was in-line with
expectations with the Zacks Consensus Estimate, currently standing
at $5.04 per share. The company intends to resume share buybacks in
2012.
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 will focus on
research-based pharmaceuticals
Pipeline Update
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. The company moved
elotuzumab, which is being developed with
Bristol-Myers Squibb
(
BMY
), into phase III studies for multiple myeloma.
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
with partner
Biogen
(
BIIB
), moved daclizumab into a phase III study for the treatment of
relapsing-remitting multiple sclerosis (
RRMS
). Abbott Labs is also working on an intestinal gel for advanced
Parkinson's disease - the company expects to file for US approval
in 2012.
Another promising pipeline candidate is bardoxolone, which is in
phase III studies for chronic kidney disease.
Neutral on Abbott Labs
We currently have a Neutral recommendation on Abbott Labs, which
carries a Zacks #3 Rank (short-term Hold rating). We believe Abbott
Labs' strong business segments, contributions from recent
acquisitions and impressive late-stage pipeline will help fortify
long-term earnings growth. Humira should continue to be a strong
growth driver in the years to come.
ABBOTT LABS (
ABT
): Free Stock Analysis Report
BIOGEN IDEC INC (
BIIB
): Free Stock Analysis Report
BRISTOL-MYERS (
BMY
): Free Stock Analysis Report
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