Abbott Raises Forecast After Sales Grow Across the BoardMichelle Fay Cortez
Abbott Laboratories, the largest maker of heart stents and adult nutritional beverages, raised its full-year earnings forecast after sales rose across its four major health-care businesses.
Abbott boosted by 3 cents its adjusted earnings forecast for 2014, to $2.19 to $2.29 a share. Second-quarter profit fell to $466 million, or 30 cents a share, from $476 million, or 30 cents, a year earlier, the Abbott Park, Illinois-based company said in a statement today.
Abbott is fine-tuning its businesses 18 months after splitting off its brand-name pharmaceutical unit. On July 14, the company announced it would sell its generic drug business for developed markets to Mylan Inc. At the same time, Abbott is expanding sales of those drugs in emerging markets, with deals such as the purchase of Chile’s CFR Pharmaceuticals in May.
“We’re ahead of our expectations through the first half of the year and are raising our earnings-per-share guidance range as we continue to shape the company for long-term growth,” said Chief Executive Officer Miles White in the statement. White said on a call with analysts that he expected sales to grow faster during the second half of the year.
Earnings excluding one-time items were 54 cents a share, beating by 3 cents the average of 20 analyst estimates compiled by Bloomberg. Revenue increased to $5.55 billion, from $5.45 billion last year, beating estimates for the first time in the past 18 months.
All four business groups saw sales increase, led by demand for medical optics in the devices unit that surged 12 percent. Sales of branded generic drugs sold in emerging markets rose 4 percent, adult nutrition sales were up 4 percent, and diagnostics increased 5 percent.
“Abbott has been a bit of a ‘show me’ story in the last few quarters as the company worked through headwinds in its established products and nutritionals businesses,” said Danielle Antalffy, an analyst at Leerink Partners in New York. After beating expectations, raising guidance and bolstering its portfolio, “Abbott may be nearing a potential sales growth inflection point,” she wrote in a note to clients today.
Abbott fell less than 1 percent to $41.05 at 4 p.m. in New York. The shares have risen 15 percent in the last 12 months.