Abbott Laboratories (ABT.N) on Wednesday reported higher quarterly earnings after splitting off its branded drug business, and the company said demand was strong for its infant formulas and diagnostic products.
But first-quarter sales slumped for medical devices and generic prescription drugs, which together represent half of the company's revenue.
Abbott, whose shares rose nearly 3 percent, reported a quarterly profit of $544 million, or 34 cents per share, from continuing operations, compared with $351 million, or 22 cents per share, a year earlier.
Excluding a tax benefit and other special items, the suburban Chicago company earned 42 cents per share. Analysts on average had expected 41 cents per share, according to Thomson Reuters I/B/E/S.
"This looks like a solid start to 2013," said Stifel Nicolaus & Co analyst Rick Wise, who described results as "in-line" with expectations.
Sales rose 1.8 percent to $5.38 billion, slightly below Wall Street expectations of $5.41 billion.
Abbott at the beginning of the year spun off its array of branded drugs, those that still have patent protection, into a new company called AbbVie Inc (ABBV.N). In doing so, it gave up Humira, a $9 billion-a-year treatment for rheumatoid arthritis that for years had been its cash cow.
Sales of Abbott's nutritional products, including its Similac infant formula, rose 8.7 percent to $1.7 billion, with about 45 percent of revenue coming from China and other emerging markets.
Abbott Chief Executive Officer Miles White said emerging markets, which have growing numbers of middle-class customers, were a linchpin of demand for its products.
"Even a bad day in an emerging market looks better than a good day in a developed market," White said in a conference call with analysts.
Sales of diagnostic products rose 4.4 percent to $1.09 billion, but would have been up 6.4 percent if not for the stronger dollar, which lowers the value of sales in overseas markets. Abbott cited strong demand in China, Russia, Brazil and other emerging markets.
But sales of medical devices fell 4.6 percent to $1.33 billion, with revenue from stents and related vascular products down almost 8 percent to $742 million due largely to price pressures in the United States. Medical optics and diabetes products showed modest declines.
Abbott said sales of generic drugs, which it calls established pharmaceuticals, declined 1.9 percent to $1.23 billion.
The company said it still expected full-year earnings of $1.98 to $2.04 per share, excluding special items.
Shares of Abbott were up 2.7 percent at $37.40 in morning trading.
(Reporting by Ransdell Pierson; Editing by Lisa Von Ahn and Gerald E. McCormick)