) reported second quarter 2014 earnings of 54 cents per share,
above the Zacks Consensus Estimate of 51 cents.
Earnings were up 17.4% from the year-ago quarter and also above
management's guidance range of 50 cents to 52 cents. Including
one-time items, second quarter earnings came in at 30 cents per
share, flat year over year.
Abbott Labs generated sales of $5.55 billion in the second quarter
of 2014, up 1.9% year over year (on a reported basis). Sales were
impacted unfavorably by foreign exchange movements during the
quarter. Quarterly sales were just above the Zacks Consensus
Estimate of $5.52 billion.
Abbott Labs, which has lately been active on the acquisition/
collaboration front to drive growth, reported strong sales from the
Second Quarter in Detail
Abbott Labs operates through four segments, namely, Established
Pharmaceuticals Division (EPD), Medical Devices, Diagnostics and
EPD sales declined marginally to $1.22 billion including a negative
impact of 2.4% due to currency fluctuations. Sales in key emerging
markets climbed 9.7% on an operational basis (excluding foreign
currency fluctuations) driven by growth in Brazil, India and China.
However, sales from developed and other markets declined 4.7% on an
The Medical Devices business generated sales of $1.4 billion, up
1.2% year over year. Diabetes Care sales were down 9.8% due to the
implementation of CMS or the competitive bidding for Medicare
patients in the U.S. The Vascular business was up 1.9% driven by
strong international sales. We note that more than 60% of sales
from the Vascular business came from international markets during
The Medical Optics business was up 12.2%. Cataract sales,
accounting for almost 70% of total Medical Optics sales, outpaced
the overall market and recorded double-digit growth propelled by
multiple new product launches.
The Nutrition business improved 1.6% year over year to $1.7
billion. Pediatric Nutrition sales declined marginally during the
quarter. Sales in this business were adversely impacted by a
supplier recall in early Aug 2013 in certain international markets.
Adult Nutrition sales grew 4.4%, driven by solid growth of its key
brand Ensure. Strong performance in the emerging markets also aided
Diagnostics business sales increased 4.8% year over year to $1.2
billion. Key areas of focus in this division include the Core
Laboratory Diagnostics, Molecular Diagnostics and Point of Care
Diagnostics businesses. Core Laboratory sales increased 5.8% and
Point of Care Diagnostics rose 3.7%. Worldwide sales of Molecular
Diagnostics were down 2.1%. Sales were adversely impacted by the
timing of tenders in the infectious disease business in multiple
2014 Earnings Outlook Raised
Abbott now expects earnings per share in the range of $2.19 to
$2.29 in 2014 (old guidance $2.16 to $2.26). The Zacks Consensus
Estimate currently stands at $2. 21 per share, within the company's
guidance. Shares were up in
reflecting investors' enthusiasm about better-than-expected results
and improved guidance.
We note that the guidance includes the developed markets generics
pharmaceutical business which Abbott agreed to sell to
) for $5.3 billion. The deal is expected to close in the first
quarter of 2015.
Abbott Labs carries a Zacks Rank #3 (Hold). Better ranked large cap
). Both stocks sport a Zacks Rank #2 (Buy).
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