Healthcare company Abbott Laboratories (ABT) on Wednesday reported a 55 percent surge in earnings from continuing operations for the first quarter, reflecting strong performance in the company's nutrition and diagnostics segments.
However, net profit for the quarter more than halved from last year, which included results of the research-based pharmaceutical business prior to its spin off earlier this year.
Looking ahead, Abbott forecast ongoing earnings per share for the second quarter in line with analysts' estimates and also affirmed its earnings outlook for fiscal 2013.
On January 1, Abbott completed the separation of its research-based pharmaceuticals business, which became AbbVie Inc. (ABBV), a new independent biopharmaceutical company.
Abbott's net earnings for the first quarter were $544 million or $0.34 per share, down from $1.24 billion or $0.78 per share in the prior-year period. In the prior year, net earnings from continuing operations was $351 million or $0.22 per share.
Excluding specified items, earnings from continuing operations were $674 million or $0.42 per share compared to $645 million or $0.40 per share in the year-ago quarter. On average, 15 analysts polled by Thomson Reuters expected the company to earn $0.41 per share. Analysts' estimates typically exclude special items.
Miles White, chairman and chief executive officer of Abbott said, "Strong performance in Nutrition and Diagnostics, as well as overall results in emerging markets, led our sales growth this quarter. We had significant new product and geographic expansion activity during the quarter that positions Abbott well for continued growth."
Net sales for the quarter grew 2 percent to $5.38 billion from $5.28 billion in the year-ago period, but includes an unfavorable 1.7 percent effect of foreign exchange. Unfavorable exchange was primarily driven by the weakening of the Japanese yen versus the U.S. dollar.
Excluding foreign exchange, worldwide sales increased 3.5 percent from last year. Analysts had a consensus estimate of $5.42 billion.
Sales for the quarter were driven by 9 percent operational sales growth in Nutrition, including 15 percent international growth, and 6 percent operational sales growth in Diagnostics.
Abbott continued to expand its presence in emerging markets across all business segments. Emerging market sales were $2.2 billion in the first quarter, up 15 percent on an operational basis. Emerging market sales comprise more than 40 percent of Abbott's total sales.
Established Pharmaceuticals sales increased 1 percent on an operational basis. The segment is focused on 14 key emerging markets where the demand for healthcare is expanding. Worldwide Medical Devices sales decreased 3 percent on an operational basis.
Looking ahead to the second quarter, Abbott forecast ongoing earnings per share in a range of $0.43 to $0.45. Including net specified items of $0.16 per share, the company forecast reported earnings from continuing operations of $0.27 to $0.29 per share. Analysts expect the company to earn $0.44 per share.
For fiscal 2013, Abbott maintained its outlook for ongoing earnings in a range of $1.98 to $2.04 per share. Analysts expect the company to report earnings of $2.01 per share for the year.
The company sees net specified items for the full year of about $0.59 per share. Including these net specified items, the company continues to project reported earnings from continuing operations for the year in a range of $1.39 to $1.45 per share for the year.
In Wednesday's regular session, ABT is trading at $37.06, up $0.66 or 1.81 percent on a volume of 641,799 shares.
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