* Adj earnings 46 cents/share vs Wall Street view 44 cents
* Nutritional product sales up 8 percent
* Sales of medical devices, generic prescription drugs fall
* Full-year profit forecast unchanged
* Shares rise 0.4 percent
By Ransdell Pierson
July 17 Abbott Laboratories reported
better-than-expected second-quarter earnings on Wednesday as
strong demand for nutritional products offset lower sales of
medical devices and generic prescription drugs.
Despite the earnings beat, Abbott left its full-year profit
forecast unchanged at $1.98 to $2.04 per share.
Results beat expectations because of improved profit margins
and cost controls, Wells Fargo analyst Larry Biegelsen said in a
Sales of nutritional products, including Similac infant
formula and Ensure beverages for adults, rose 7.9 percent to
$1.7 billion, representing almost a third of Abbott's total
Abbott and rival infant formula makers, including Mead
Johnson Nutrition Co, Danone SA and Nestle SA
, have cut prices of their products in recent weeks
following an investigation by China into possible price-fixing
and anti-competitive behavior.
Abbott formulas have annual sales of about $400 million in
China, representing about 2 percent of overall company sales.
Abbott Chief Executive Miles White on Wednesday said the
investigations are unlikely to derail growing demand in China
for the products.
"I think the market dynamics remain robust," White said.
"And fortunately for us, China doesn't represent a
disproportionately large portion of the nutrition business."
Glenn Novarro, an analyst with RBC Capital Markets, said
Abbott shares had dipped as much as five percent in the past
month on concerns about the China investigation and price cuts,
and are a buying opportunity.
Abbott's profit margins improved during the quarter in part
because the company is building its nutritionals factories
closer to customers in emerging markets, said Stifel Nicolaus &
Co analyst Rick Wise. "So they're reducing transportation
Abbott, which in January spun off its branded prescription
drugs business into a new company called AbbVie Inc,
earned $476 million, or 30 cents per share, from continuing
operations in the quarter, up from $411 million, or 26 cents per
share, a year earlier.
Excluding special items, profit was 46 cents per share,
beating analysts' average estimate by 2 cents, according to
Thomson Reuters I/B/E/S.
Revenue rose 2.5 percent to $5.45 billion, slightly below
Wall Street expectations for $5.52 billion. Revenue would have
risen 4.2 percent if not for the stronger dollar, which hurts
the value of sales in overseas markets.
Sales from the company's array of medical diagnostics rose
5.3 percent to $1.14 billion.
Medical device sales slipped 1.6 percent to $1.36 billion,
but that was an improvement from the almost five 5 percent
decline in the first quarter.
Sales of generic drugs, which Abbott calls established
pharmaceuticals, were off 2.3 percent to $1.22 billion.
"If there's a weakness in the Abbott story, it's established
pharmaceuticals," said Joanne Wuensch, an analyst with BMO
Capital Markets. She noted the company is making management
changes in hopes of revitalizing the business segment.
Abbott shares were up 0.4 percent to $35.83 on the New York