July 17 (Bloomberg) -- Abbott Laboratories, the largest maker of heart stents and adult nutritional beverages, said second-quarter profit climbed 16 percent as sales increased in emerging markets including Russia and China.
Profit from continuing operations rose to $476 million, or 30 cents a share, from $411 million, or 26 cents, a year earlier, the Abbott Park, Illinois-based company said in a statement today. Earnings, excluding one-time items, of 46 cents a share beat by 2 cents the average of 21 analysts’ estimates compiled by Bloomberg.
Sales in emerging markets rose 13 percent, helping revenue increase 2.5 percent to $5.45 billion from a year earlier. Sales in China and Russia grew more than 30 percent each, Chief Financial Officer Thomas Freyman said on a conference call today. New products are bolstering Abbott’s performance, said Joanne Wuensch, an analyst at BMO Capital Markets in New York, in a July 15 note. The company has won approval for 45 medicines in 14 emerging markets, she said.
“Everything appears to be in line, the story appears to be on track, and EPS was better than expected,” Wuensch said today in a telephone call. Emerging markets were about 40 percent of Abbott’s sales, “considerably driving revenue,” she said in a later e-mail.
Abbott reiterated its 2013 forecast excluding one-time items of $1.98 to $2.04 a share. Net income dropped 72 percent to $476 million, or 30 cents, from $1.73 billion, or $1.08, a year earlier, when the company’s drug unit was still included in results. The drug business was split off into a new company, AbbVie Inc., based in North Chicago, Illinois, on Jan. 1.
“We’ve built a broad emerging market base that serves to offset volatility in any one market,” Chief Executive Officer Miles White said on the conference call.
Abbott gained less than 1 percent to $35.82 at the close in New York. The shares have increased 14 percent this year.
“We still expect Abbott’s sales and earnings per share growth to outpace its MedTech and diversified peers,” said Glenn Novarro, an analyst at RBC Capital Markets in New York, in a July 15 note to clients. “Abbott is the fastest-growing large cap company in our universe. As such, a premium valuation is justified.”
Abbott retained the original company’s medical devices, nutritional products, diagnostic tests and generic drugs. AbbVie, which will report earnings on July 26, kept the brand name drugs, including the best-selling Humira for rheumatoid arthritis.
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