Abbott Laboratories Q3 Profit Beats View, Narrows FY15 Adj. Earnings Outlook 

9 mins read

The FINANCIAL — Abbott on October  announced financial results for the third quarter ended Sept. 30, 2015.

Third-quarter worldwide sales of $5.2 billion increased 10.9 percent on an operational basis and 1.4 percent on a reported basis.

Adjusted diluted EPS from continuing operations, which excludes specified items, was $0.54 in the third quarter, at the high end of the previous guidance range. Reported diluted EPS from continuing operations under GAAP was $0.39.

Abbott narrowed its full-year 2015 adjusted EPS guidance range for continuing operations to $2.14 to $2.16. Projected full-year 2015 EPS for continuing operations under GAAP is $1.59 to $1.61.

Abbott achieved double-digit emerging market sales growth on an organic basis, which excludes the impact of 2014 acquisitions and foreign exchange.

Abbott continues to deliver improvement in gross margin, while funding investments to expand its innovative product offerings and build new markets. In the third quarter, Abbott launched Similac® Sensitive Non-GMO and Go & Grow by Similac® Non-GMO in the U.S.; and continued the international rollout of its TECNIS® Symfony Extended Range intraocular lens across multiple markets.

“Despite currency headwinds, we are on track to deliver the financial commitments we set at the beginning of the year,” said Miles D. White, chairman and chief executive officer, Abbott.  “Our underlying growth is strong and we continue to see robust demand in emerging markets.”

Third-quarter 2015 worldwide sales of $5.2 billion increased 10.9 percent on an operational basis and 1.4 percent on a reported basis, including an unfavorable 9.5 percent effect of foreign exchange.

International sales increased 15.4 percent on an operational basis and 1.6 percent on a reported basis in the third quarter.

Emerging market sales increased 21.2 percent on an operational basis and 8.2 percent on a reported basis in the third quarter. Excluding the impact of 2014 acquisitions and foreign exchange, emerging market sales increased double digits in the quarter, according to Abbott.

Nutrition

Worldwide Nutrition sales increased 6.5 percent in the third quarter on an operational basis and 0.2 percent on a reported basis, including an unfavorable 6.3 percent effect of foreign exchange.

Worldwide Pediatric Nutrition sales increased 9.7 percent on an operational basis and 4.1 percent on a reported basis in the quarter, including an unfavorable 5.6 percent effect of foreign exchange. Sales growth in the quarter was led by continued market uptake of Eleva™ in the premium segment of the Chinese market and Similac® Advance® non-GMO in the U.S.  During the quarter, Abbott launched Similac Sensitive Non-GMO and Go & Grow by Similac Non-GMO in the U.S., providing parents with additional formula choices.

Worldwide Adult Nutrition sales increased 2.6 percent on an operational basis and decreased 4.5 percent on a reported basis in the quarter, including an unfavorable 7.1 percent effect of foreign exchange. Further category expansion is driving strong international performance, including double-digit growth in Latin America. As expected, U.S. Adult Nutrition sales were impacted by competitive and market dynamics. 

Diagnostics

Worldwide Diagnostics sales increased 7.9 percent in the third quarter on an operational basis and decreased 2.1 percent on a reported basis, including an unfavorable 10.0 percent effect of foreign exchange. This business continues to deliver above-market growth across emerging and developed markets, while continuing to expand margins and develop next-generation diagnostic platforms.

Core Laboratory Diagnostics sales increased 8.1 percent in the quarter on an operational basis and decreased 3.1 percent on a reported basis, including an unfavorable 11.2 percent effect of foreign exchange. Operational sales growth in the quarter was led by double-digit growth in emerging markets and continued share gains resulting from customer-focused solutions that help laboratories manage large testing volumes and increase operational efficiencies.

Molecular Diagnostics sales increased 2.8 percent in the quarter on an operational basis and decreased 4.8 percent on a reported basis, including an unfavorable 7.6 percent effect of foreign exchange. Infectious disease testing, which remains Abbott’s core focus area in Molecular Diagnostics, increased double digits in the quarter on an operational basis.  As expected, U.S. growth was impacted by the planned scale down of the genetics business and continued market dynamics in oncology.

Point of Care Diagnostics sales increased 11.8 percent in the quarter on an operational basis as this business continues to enhance its product offering and expand its geographic presence. Sales increased 10.0 percent on a reported basis, including an unfavorable 1.8 percent effect of foreign exchange.

Established Pharmaceuticals

Established Pharmaceuticals sales increased 42.6 percent in the third quarter on an operational basis and 24.6 percent on a reported basis, including an unfavorable 18.0 percent effect of foreign exchange.  Excluding the impact of 2014 acquisitions and foreign exchange, sales increased double digits in the quarter.

Sales in Key Emerging Markets increased 37.1 percent on an operational basis and 18.9 percent on a reported basis, including an unfavorable 18.2 percent effect of foreign exchange. Operational sales growth in the quarter was led by India, Russia, Brazil, China, and several markets throughout Latin America.

Medical Devices

Worldwide Medical Devices sales increased 1.2 percent in the third quarter on an operational basis and decreased 7.4 percent on a reported basis, including an unfavorable 8.6 percent effect of foreign exchange.

Worldwide sales of Vascular products increased 0.5 percent in the quarter on an operational basis and decreased 7.8 percent on a reported basis, including an unfavorable 8.3 percent effect of foreign exchange. Sales of Abbott’s MitraClip® device for the treatment of mitral regurgitation increased double digits globally, as Abbott continues to build the market for this first-in-class device. During the quarter, Abbott continued to broaden its foundation as a leader in the treatment of mitral valve disease with the acquisition of Tendyne Holdings Inc. and an option agreement to acquire Cephea Valve Technologies. Abbott also launched XIENCE™ Alpine, its drug-eluting stent system designed for enhanced performance in complex interventions, and Absorb™ GT1, its bioresorbable vascular scaffold, in several markets across Europe and Asia.

Worldwide Diabetes Care sales increased 1.0 percent in the quarter on an operational basis and decreased 8.4 percent on a reported basis, including an unfavorable 9.4 percent effect of foreign exchange. Abbott’s FreeStyle® Libre Flash Glucose Monitoring System contributed to international sales growth in the quarter.

Worldwide Medical Optics sales increased 3.0 percent in the quarter on an operational basis and decreased 5.3 percent on a reported basis, including an unfavorable 8.3 percent effect of foreign exchange. Sales of cataract products, which represent approximately 70 percent of Medical Optics sales, increased high single digits, outpacing growth of the global cataract market, led by continued adoption of recently launched products in the premium intraocular lens segment.

ABBOTT NARROWS ITS FULL-YEAR 2015 EARNINGS-PER-SHARE GUIDANCE

Abbott narrowed its full-year 2015 guidance range for earnings per share from continuing operations, excluding specified items, to $2.14 to $2.16. The mid-point of this range remains unchanged from previous guidance.

Abbott forecasts net specified items related to continuing operations for the full year 2015 of approximately $0.55 per share. Specified items include intangible amortization expense, charges associated with cost reduction initiatives, and expenses related to acquisitions, partially offset by a gain on the sale of a portion of Abbott’s position in Mylan stock as well as a decrease in the fair value of contingent consideration related to a business acquisition.

Including net specified items, projected earnings per share from continuing operations under U.S. Generally Accepted Accounting Principles (GAAP) would be $1.59 to $1.61 for the full year 2015.

 

Leave a Reply