(Adds analyst comments, details on products, updates trading)
By Ransdell Pierson
April 16 Abbott Laboratories Inc
reported better-than-expected quarterly earnings on Wednesday,
but combined sales of its nutritional products, medical devices
and generic medicines were slightly below Wall Street
The company earned $375 million, or 24 cents a share, in the
three months ended March 31. That compared with $544 million, or
34 cents per share, in the year-ago quarter, when Abbott took
charges for licensing and acquisitions.
Excluding special charges, Abbott earned 41 cents per share.
Analysts, on average, were expecting 36 cents per share,
according to Thomson Reuters I/B/E/S.
Wells Fargo analyst Lawrence Biegelsen said operating
expenses of $2 billion in the quarter were $100 million below
his forecasts, and bolstered results.
Shares were up 0.4 percent at $38.14 in afternoon trading on
the New York Stock Exchange, amid a 0.7 percent gain for the
ARCA Pharmaceutical Index of large drugmakers.
Abbott, which spun off its patent-protected drugs early last
year into a separate publicly traded company called AbbVie Inc
, is trying to build momentum after failing for five
straight quarters to meet Wall Street sales forecasts.
"The company is still in transition mode," said RBC Capital
Markets analyst Glenn Novarro. "But management is very confident
that business will accelerate in the remainder of the year, led
by nutritionals, where they should be able to recapture market
Sales of nutritional products, the company's biggest product
line which includes Similac infant formula and Ensure beverages
for adults, fell 4 percent to $1.63 billion in the quarter.
Abbott said a recall of its milk formula brands in China and
Vietnam last August, due to fears an ingredient provided by an
outside supplier might be contaminated, crimped sales of the
products by $75 million in the first quarter.
Chief Executive Miles White, in a conference call with
analysts, said sales of the nutritional products will rebound in
the second half of the year, helped by introduction of new
products in China and other overseas markets.
Overall company performance should improve in the third and
fourth quarters, he said, helped by improving profit margins.
"The next half gets better."
Abbott said global company sales fell 2.5 percent to $5.24
billion. Wall Street expected $5.28 billion.
Sales would have grown 0.5 percent if not for the stronger
dollar, which lowers the value of sales in markets outside the
Abbott medical devices also struggled in the quarter, with
sales falling 1.2 percent to $1.31 billion. Declines for
diabetes care products more than offset strong gains for the
company's line of medical optics brands.
Although Abbott had spun off its most profitable
prescription medicines into AbbVie, it continues to sell a large
number of generic medicines that it calls "established
The medicines, sold largely in emerging markets, have
struggled in the past year, and sales fell 6.6 percent in the
first quarter to $1.15 billion.
"We'd like to see a steadier course for that business," said
Edward Jones analyst Jeff Windau. He added the drugs were
providing a steady flow of cash for overall company operations,
and had potential to deliver sales growth.
The company reaffirmed it continues to expect full-year 2014
earnings from continuing operations, excluding special items, of
$2.16 to $2.26 per share.
(Editing by Sofina Mirza-Reid and Bernadette Baum)