Abbott Labs Profit Tops Views
July 20 2016 - 9:03AM
Dow Jones News
By Joshua Jamerson
Abbott Laboratories Inc., in the middle of its tie-up with St.
Jude Medical Inc., said Wednesday that earnings declined 22% from a
year earlier amid higher expenses.
However, adjusted profit beat analysts expectations by 2 cents
and revenue climbed, helped by recent product launches. Shares rose
2.9% to $43 in recent premarket trading.
Abbott's Absorb dissolving heart stent was approved by the U.S.
Food and Drug Administration earlier this month. Chairman and Chief
Executive Miles D. White said recent approvals and launches such as
Symfony, its intraocular lenses for the treatment of cataracts, and
Absorb are contributing to growth.
For the quarter ended in June, sales rose 1.4% in Abbott's
nutrition segment, the company's largest. Recently launched infant
and toddler GMO-free baby food and formula and strong performance
in several countries in Latin America and Asia drove a 4.3%
increase on an operational basis.
Overall sales rose 3.2% while operational revenue, which factors
out currency changes, increased 6.4%.
Abbott posted a profit of $615 million, or 41 cents a share,
down from $784 million, or 52 cents a share, a year earlier. The
year-ago quarter included a gain on a portion of Abbott's position
in Mylan Inc. Excluding items such as expenses associated with
acquisitions, earnings per share were 55 cents in the latest
period.
Net sales rose $5.33 billion from $5.17 billion a year ago.
Analysts surveyed by Thomson Reuters forecast adjusted per-share
earnings of 53 cents on revenue of $5.24 billion.
St. Jude Medical on Wednesday said strong demand boosted revenue
11% in its latest quarter. In April, Abbott agreed to buy St. Jude
for $25 billion amid a flurry of transactions in the health-care
sector. Companies are responding to cost pressures by beefing up,
increasing their negotiating leverage and pricing power. St. Jude
and Abbott have said they expect the merger to close in the fourth
quarter.
Abbott's operating costs and expenses climbed 1.7% to $4.52
billion in the period.
For the year, Abbott backed its adjusted earnings guidance of
$2.14 to $2.24.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
July 20, 2016 08:48 ET (12:48 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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