) reported third quarter earnings of $1.30 per share, a couple of
cents above the Zacks Consensus Estimate of $1.28 and 10.2% above
the year-ago earnings. Third quarter 2012 earnings exceeded the
company's guidance of $1.26 to $1.28 per share.
Including one-time items, third quarter earnings came in at
$1.21 per share, well above the year-ago earnings of 19 cents per
Third quarter revenues, however, declined 0.4% to $9.8
billion, missing the Zacks Consensus Estimate of $9.9 billion.
Foreign exchange fluctuations negatively impacted sales by
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 2.4%.
Humira was a major contributor with sales coming in at $2.3
billion, up 10.1%. While Humira recorded sales growth in the US
(27.0%), international sales (down 2.2%) were affected by
negative currency fluctuation.
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 use in patients with
non-radiographic axial spondyloarthritis and the treatment of
moderately active Crohn's disease in adult patients who have not
responded sufficiently to conventional therapy.
Abbott Labs also gained US approval for Humira for the
treatment of moderately to severely active ulcerative colitis
(UC) in patients who have not responded adequately to
Abbott Labs is currently evaluating Humira's safety and
efficacy in adult patients with moderate to severe hidradenitis
suppurativa (HS). Other indications for which Humira is being
studied include uveitis, peripheral spondyloarthropathies (SpA),
and axial SpA (US).
AndroGel also contributed to Proprietary Pharmaceutical sales
The Nutritionals business grew 4.5% to $1.6 billion. Nutrition
sales in the US increased 5.0% to $715 million. The company said
that Similac continued to gain share in the US. Outside the US,
Nutrition sales grew 4.1% to $890 million.
Other areas that witnessed growth include the Core Laboratory
Diagnostics and Point of Care Diagnostics businesses. Established
Pharmaceuticals sales continued to decline with sales coming in
at $1.3 billion, down 7.3%.
2012 Outlook Narrowed
Abbott Labs narrowed its earnings guidance for 2012. The
company expects 2012 earnings per share in the range of $5.06 to
$5.08 (old guidance: $5.00 to $5.10). The Zacks Consensus
Estimate currently stands at $5.06 per share.
The company declared a quarterly dividend of 51 cents per
Abbott Labs also provided an update on its pipeline. 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
), is evaluating daclizumab in a phase III study for the
treatment of relapsing-remitting multiple sclerosis (RRMS).
Results are expected in 2014.
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 and Abbott Labs expects
to file for US approval by year end.
Another promising pipeline candidate is bardoxolone, which is
in phase III studies for chronic kidney disease.
The company, which recently reported impressive phase II data
from its interferon-free hepatitis C (HCV) program, said that it
has initiated a phase III study with its interferon-free
Split Remains on Track
Abbott Labs remains on track to split into two separate
publicly traded companies on January 1, 2013. While one company
will deal in diversified medical products, the other (AbbVie)
will focus on research-based pharmaceuticals. We are positive on
the split which should allow the two separate entities to perform
in a more focused manner.
Moreover, the company's pipeline is moving along. The
successful development of the interferon-free HCV regimen would
be a major boost for the stock. We currently have a Neutral
recommendation on Abbott Labs, which carries a Zacks #3 Rank
(short-term Hold rating).
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