) reported first quarter earnings of $1.03 per share, three cents
above the Zacks Consensus Estimate of $1.00 and 13.2% above the
year-earlier earnings. Including one-time items, first quarter
earnings increased 41.8% to 78 cents per share. Higher revenues led
to the improvement.
First quarter revenues increased 4.6% to $9.5 billion, just
above the Zacks Consensus Estimate of $9.3 billion. Foreign
exchange fluctuations negatively impacted sales by 1.3%.
The Quarter in Detail
Several of the business categories performed well during the
quarter. Proprietary Pharmaceutical sales were $4.1 billion, up
7.1%. Humira was a major contributor with sales coming in at $1.9
billion, up 17.4%. Humira recorded sales growth in both the US
(22.7%) and international markets (14.2%) during the quarter.
Abbott Labs is looking to get Humira approved for additional
indications which would help drive growth further. The company
recently gained EU approval for Humira for ulcerative colitis.
Abbott Labs is currently evaluating Humira's safety and efficacy in
adult patients with moderate to severe hidradenitis suppurativa
Lupron, Androgel, Creon and Synthroid also contributed to
Proprietary Pharmaceutical sales growth.
The Nutritionals business grew 10.1% to $1.6 billion. Nutrition
sales in the US increased 11% to $707 million. The company said
that it continued to recover the share it had lost in the US due to
the late 2010 Similac recall. Outside the US, Nutrition sales
experienced single-digit growth with sales increasing 9.3% to $859
million. Strong performance of pediatric nutritionals in emerging
markets helped drive international nutrition sales.
Other areas that witnessed growth include the Core Laboratory
Diagnostics, Molecular Diagnostics, Medical Optics and Point of
Care Diagnostics businesses.
Established Pharmaceuticals sales, however, continued to decline
with sales coming in at $1.3 billion, down 1.6%.
2012 Outlook Raised
Based on first quarter results, Abbott Labs increased its
earnings guidance for 2012. The company now expects 2012 earnings
in the range of $5.00 to $5.10, up from the earlier guidance of
$4.95 to $5.05 per share. The Zacks Consensus Estimate currently
stands at $5.02 per share, towards the lower end of the new
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 (
Abbott Labs is also working on an intestinal gel 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). Shares were up
1.27% in pre-market trading.
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