Abbott sales and outlook disappoint; shares fall

By Ransdell Pierson

NEW YORK (Reuters) - Drugmaker Abbott Laboratories (ABT.N) reported somewhat disappointing quarterly sales on Wednesday and failed to lift its 2009 profit forecast as some investors had hoped, sending its shares down more than 3 percent.

Second-quarter profit fell 2.6 percent as generic competition for Abbott's Depakote epilepsy drug offset strong sales growth of its Humira arthritis medicine and Xience stent.

"They didn't increase guidance, which might be spooking some people," said Barclays Capital analyst Tony Butler. Wall Street had high expectations for Abbott following strong quarterly results Tuesday by rival diversified healthcare company Johnson & Johnson (JNJ.N), he added.

Abbott reported earnings of $1.29 billion, or 83 cents per share, down from $1.32 billion, or 85 cents per share, a year earlier.

Excluding special items, the suburban Chicago company earned 89 cents per share, matching the average forecast of analysts polled by Reuters Estimates.

Sales rose 2.5 percent to $7.5 billion, a bit shy of the Reuters Estimates forecast of $7.55 billion. Growth would have been 8 percentage points higher if not for the strong dollar, which lowers the value of sales in overseas markets.

"Though fine operationally, the second quarter was not a 'beat and raise' quarter," Leerink Swann analyst Rick Wise said in a research note.

Abbott had also suffered in the first quarter, hurt by the strong dollar as well as U.S. inventory drawdowns that crimped purchases by wholesalers.

Second-quarter sales of prescription drugs fell 4.3 percent to $3.95 billion, as the recent U.S. patent expiration on Depakote opened the floodgates to cheaper generics. The drug's quarterly sales fell 75 percent to $102 million.

But sales of Humira, a newer injectable drug that has made inroads against Johnson & Johnson's Remicade and Wyeth's WYE.N Enbrel, rose 20 percent to $1.31 billion.

Results also benefited from Abbott's vascular products. Sales in the category, which includes the Xience stent, surged 34 percent to $658 million.

Sales rose 4 percent to $1.28 billion for nutritional products, but fell 6 percent to $878 million for diagnostic products.

Abbott stuck to its full-year earnings forecast of $3.65 to $3.70 per share, noting that the midpoint of the range would reflect double-digit profit growth.

Shares of Abbott were down 3.4 percent at $44.89 on the New York Stock Exchange.

(Additional reporting by Lewis Krauskopf; Editing by Derek Caney and Lisa Von Ahn)