Healthcare giant Abbott Laboratories (ABT) Wednesday reported a near-flat profit for the second quarter, despite an 18% rise in sales, as costs and expenses increased 24% from last year. Adjusted earnings topped Wall Street consensus estimate as well as the company's own guidance. Further, the company maintained its earnings per share forecast for 2010.
Abbott Park, Illinois-based Abbott reported net earnings of $1.292 billion or $0.83 per share in the second quarter, compared to $1.288 billion or $0.83 per share in the previous year.
In the just concluded quarter, net earnings included $0.05 per share charge for acquired in-process research and development related to the Neurocrine collaboration, $0.07 per share for a litigation reserve, $0.05 per share for closing and integration costs associated with recent acquisitions and $0.01 per share for cost reduction initiatives.
In the previous year, results included $0.02 per share charge, primarily for costs associated with the acquisition of Advanced Medical Optics and $0.04 per share for cost reduction initiatives.
Net earnings excluding specified items increased to $1.578 billion or $1.01 per share from $1.388 billion or $0.89 per share in the same quarter last year. On average, 16 analysts polled by Thomson Reuters expected the company to earn $1.00 per share in the second quarter. Analysts' estimates typically exclude special items.
Abbott's guidance was for second-quarter earnings of $0.98 to $1.00 per share.
Net sales in the quarter increased 17.8% to $8.826 billion from $7.495 billion in the previous year, including a favorable 2.7% effect of exchange rates. Analysts were looking for second-quarter revenue of $8.84 billion. Abbott operates in four segments: Pharmaceutical Products, Diagnostic Products, Nutritional Products, and Vascular Products.
Worldwide pharmaceutical sales increased 24.5% to $4.914 billion, including a favorable 2.8% effect of exchange rates and a full quarter of sales contribution from the Solvay Pharmaceuticals acquisition that closed on February 15.
Arthritis treatment Humira's sales improved 21.5% in the quarter to $1.593 billion, while HIV drug Kaletra's sales dipped 14.2% to $294 million.
Among cholesterol drugs, TriCor/ Trilipix sales improved 15.6% to $388 million and Niaspan sales edged up 1.6% to $211 million.
In vascular products, sales increased 26.9% in the quarter to $835 million, driven by strong international growth. The segment benefited from a favorable 2.3% effect of exchange rates. Worldwide diagnostics sales increased 8% to $948 million and included a positive currency impact of 3.5%.
Sales of coronary stents increased 34.2% to $533 million and core laboratory diagnostics sales grew 6.15 to $793 million. Diabetes care products sold 5.4% more and medical optics sales edged up 1.4% from last year. In Molecular diagnostics, sales rose 22.6% to $89 million.
Worldwide nutritional sales increased 10.1% to $1.414 billion, driven by strong double-digit growth in international nutritionals and included a favorable 2.8% effect of exchange rates. Sales of Paediatric nutritionals increased 11.7% and Adult Nutritional sales advanced 8.8%.
Total International sales in the quarter increased 28.1% to $5.035 billion and total U.S. sales improved 6.4% to $3.791 billion. Operating earnings in the quarter slipped to $1.606 billion from last year's $1.671 billion. Total operating cost and expenses increased to $7.220 billion from last year's $5.824 billion, owing mainly to higher selling, general and administrative expenses and a rise in research and development costs. In the first quarter of the current fiscal, Abbott's net earnings totaled $1.003 billion or $0.64 per share. Excluding items such as the one-time impact of the devaluation of the Venezuelan bolivar and healthcare reform impact as well as acquisition costs, earnings were $1.267 billion or $0.81 per share. Sales increased 14.6% to $7.698 billion.
In the first half of the year, net earnings declined to $2.295 billion or $1.47 per share from $2.727 billion or $1.75 per share in the same period last year. In the first six months, net sales rose to $16.524 billion from $14.213 billion in the prior year. Commenting on the results, Miles White, chairman and chief executive officer of Abbott, said, ''Abbott's diverse sources of earnings growth led to strong financial results again this quarter, continuing Abbott's record of steady, reliable performance.
Further, Abbott confirmed its previously issued earnings-per-share guidance of $4.13 to $4.18 for full-year 2010, excluding specified items. The midpoint of this guidance range reflects growth of around 12% from 2009.
This guidance excludes the impact of health care reform on deferred tax assets, acquisition integration, cost reduction initiatives, a litigation reserve, in-process research and development related to the Neurocrine collaboration, and the one-time impact of the devaluation of the Venezuelan bolivar.
Including these items, projected 2010 earnings per share are expected to be $3.58 to $3.63. This forecast excludes additional integration costs associated with the Solvay Pharmaceuticals acquisition, which are expected to be quantified in the third quarter.
Analysts expect 2010 earnings of $4.10 to $4.19 per share with a consensus of $4.15 per share.
Abbott's larger rival Johnson & Johnson (JNJ) Tuesday reported a 7% growth in second-quarter profit. The company's net earnings grew to $3.449 billion or $1.23 per share from $3.208 billion or $1.15 per share in the previous year. Sales in the quarter edged up 0.6% to $15.330 billion. Abbott's drug-eluting stent Xience is reportedly giving a tough time to competitors.
Medical device maker Boston Scientific Corp. (BSX) Tuesday reported net income for the second quarter of $98.0 million or $0.06 per share, down from $158.0 million or $0.10 per share in the year-ago quarter. Revenues for the quarter decreased 7% to $1.93 billion.
ABT is currently trading at $47.88, up $0.41 or 0.86%, on 649,810 shares. For the past year, the stock traded in the range of $43.45-$56.79.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.