Abbott Quarterly Earnings Beat Estimates on Device Salesby
All four business units reported revenue gains for period
CEO White wants more Alere data; ‘fair amount’ not provided
Abbott Laboratories, embroiled in a contentious acquisition of the medical testing company Alere Inc., said second-quarter profit topped analysts’ estimates as device demand led rising sales across all four of its business segments.
Earnings excluding one-time items were 55 cents a share, beating by 2 cents the average of analysts’ estimates surveyed by Bloomberg. Profit from continuing operations fell to $599 million, or 40 cents a share, from $786 million, or 52 cents, a year ago, the Abbott Park, Illinois-based company said in a statement.
Chief Executive Officer Miles White said he’s still waiting for information that Abbott requested from Alere, dismissing details the company filed with the U.S. Securities and Exchange Commission last week and saying the release was “over-enthusiastically embraced” by one analyst. At this point, there is no way to predict if the acquisition of Alere, announced in February for $5.8 billion, will work out the way it was originally planned, he said.
“From our perspective, there has been no change,” White said on a conference call with analysts. “We have made a number of requests regarding books and records, things that we want to audit and have access to. Some of that has been provided, and a fair amount has not and continues not to be. There is nothing more I can say at this point.”
Mark Massaro, an analyst at Canaccord Genuity who said in a note last week that the Alere filing “put to bed” concerns that the deal wouldn’t close at the $56-a-share price originally offered, reiterated his position on Wednesday. Massaro said he had no doubt that White’s comments were directed at him, and he wasn’t offended.
It is still “highly likely” that the acquisition will close at the originally agreed-upon price, Massaro said in a telephone interview.
Abbott gained 2.3 percent to $42.77 at 12:03 p.m. New York time, while Alere rose 1.2 percent to $44.12.
The company, which sat out the merger frenzy that swept the health-care industry last year, has since made up time, agreeing to buy Alere in February and striking a $25 billion deal for St. Jude Medical Inc. in April.
St. Jude, based in St. Paul, Minnesota, also reported earnings Thursday, with second-quarter adjusted profit excluding some items of $1.06 a share, matching the average estimate of analysts compiled by Bloomberg. Revenue gained 11 percent to $1.56 billion from a year earlier.
Abbott’s revenue increased 3.2 percent to $5.33 billion. Abbott’s medical device unit led its sales performance, helped by the settlement of an issue surrounding royalty revenues from a previous year and demand for MitraClip, a device used to repair damaged mitral valves in the heart. The company’s endovascular business also posted strong results, led by sales of stents used to treat blocked blood vessels in the legs and devices used to close puncture wounds.
The company maintained its adjusted earnings forecast of $2.14 to $2.24 a share for 2016.
Abbott’s second-quarter performance by unit, including foreign exchange effects:
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