Abbott Labs Swings to Loss After Booking Charge on Mylan Stake
October 19 2016 - 9:50AM
Dow Jones News
Abbott Laboratories swung to a loss in the most recent quarter
as it booked a hefty charge related to the stock-price drop of
embattled EpiPen maker Mylan NV, in which it owns a stake.
Shares declined 1.9% premarket to $40.40.
Still, adjusted profit and revenue topped expectations and the
company narrowed—and raised at the midpoint—its 2016 adjusted
earnings view to $2.19 to $2.21 a share, from a previous range of
$2.14 to $2.24.
Chief Executive Miles White cited strong performance in
established pharmaceuticals and medical devices sales, which rose
5.3% and 6.4%, respectively. However, sales slipped 2% in Abbott's
nutrition segment, the company's largest.
In all for the September quarter, Abbott reported a loss of $329
million, or 22 cents a share, compared with a year-earlier profit
of $580 million, or 38 cents a share, a year earlier.
The period this year included a 66-cent charge associated with
Abbott's position in Mylan to reflect Mylan's share price as of
Sept. 30. Mylan's stock has stumbled since this summer amid popular
outrage about higher drug costs and an investigation into the
company's substantial price increases for the EpiPen emergency
allergy treatment.
Excluding certain items, Abbott said adjusted per-share earnings
climbed to 59 cents in the latest period from 54 cents. Sales rose
3% to $5.3 billion. Operational revenue, which factors out currency
changes, rose 4%. Analysts polled by Thomson Reuters had forecast
adjusted per-share earnings of 58 cents on revenue of $5.29
billion.
In April, Abbott agreed to buy St. Jude Medical Inc. for $25
billion amid consolidation 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.
St. Jude Medical on Wednesday said its third-quarter revenue
rose, led by a 13% sales increase abroad, though profit edged
lower.
Write to Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
October 19, 2016 09:35 ET (13:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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