The FINANCIAL — Abbott on April 19 announced financial results for the first quarter ended March 31, 2017.
Reported diluted EPS from continuing operations under GAAP was $0.22 in the first quarter. Excluding specified items, adjusted diluted EPS from continuing operations was $0.48 in the first quarter, above the previous guidance range of $0.42 to $0.44.
First-quarter worldwide sales of $6.3 billion increased 29.7 percent on a reported basis and 3.2 percent on a comparable operational† basis.
On Jan. 4, 2017, Abbott completed the acquisition of St. Jude Medical, establishing the company as a leader in the broad medical device arena and providing expanded opportunities for future growth.
In the first quarter, Abbott received FDA approval for MRI-conditional labeling for both the Assurity MRITM pacemaker and the TendrilTM MRI pacing lead. Abbott submitted for FDA approval of MRI-conditional labeling for its EllipseTM implantable cardioverter defibrillator (ICD) system.
In January, Abbott initiated the U.S. launch of its new Ensite PrecisionTM cardiac mapping system, which helps physicians more effectively treat patients experiencing arrhythmias in the heart, and initiated the international launch of its new AlinityTM diagnostics systems.
In February, Abbott released real-world data from more than 50,000 users of its sensor-based FreeStyle® Libre glucose monitoring system. The data showed that FreeStyle Libre use was associated with higher frequency of glucose testing and better diabetes outcomes, including improved control of glucose levels.
“Our first quarter results reflect a strong start to the year,” said Miles D. White, chairman and chief executive officer, Abbott. “The integration of St. Jude is going well and recently launched products are contributing to double-digit sales growth across several areas of our Medical Devices business.”
First-quarter 2017 worldwide sales of $6.3 billion increased 29.7 percent on a reported basis. On a comparable operational basis, worldwide sales increased 3.2 percent. Refer to the final table for a reconciliation of comparable historical revenue, according to Abbott.
Worldwide Nutrition sales decreased 1.7 percent on a reported basis in the first quarter, including an unfavorable 0.7 percent effect of foreign exchange, and decreased 1.0 percent on an operational basis.
Worldwide Pediatric Nutrition sales decreased 4.1 percent on a reported basis in the first quarter, including an unfavorable 0.8 percent effect of foreign exchange, and decreased 3.3 percent on an operational basis. In the U.S., above-market sales growth was led by continued uptake of several recently launched infant formula products. International sales declined 12.2 percent on a reported basis and 10.8 percent on an operational basis. As expected, challenging conditions in the Chinese infant formula market continued to impact international performance.
Worldwide Adult Nutrition sales increased 1.5 percent on a reported basis in the first quarter, including an unfavorable 0.5 percent effect of foreign exchange, and increased 2.0 percent on an operational basis. Strong performance in international Adult Nutrition, led by continued growth of Ensure® and Glucerna® in Latin America and other priority geographies, was partially offset by lower than expected performance in the U.S.
Worldwide Diagnostics sales increased 3.6 percent on a reported basis in the first quarter, including an unfavorable 1.1 percent effect of foreign exchange, and increased 4.7 percent on an operational basis. Excluding the impact of Venezuelan operations, Diagnostics sales would have increased 5.3 percent on a reported basis and 6.4 percent on an operational basis in the first quarter.
Core Laboratory Diagnostics sales increased 3.0 percent on a reported basis in the first quarter, including an unfavorable 1.3 percent effect of foreign exchange, and increased 4.3 percent on an operational basis. During the quarter, Abbott initiated the international launch of “Alinity s” for blood and plasma screening, “Alinity c” for clinical chemistry and “Alinity i” for immunoassay diagnostics. The new Alinity family of harmonized systems provides high quality results and is designed to be more efficient – running more tests in less space, generating test results faster and minimizing human errors.
Molecular Diagnostics sales increased 3.9 percent on both a reported and operational basis in the first quarter. Continued strong growth in infectious disease testing, Abbott’s core area of focus in the molecular diagnostics market, was primarily offset by its planned scale down in other testing areas.
Point of Care Diagnostics sales increased 7.5 percent on both a reported and operational basis in the first quarter. Sales growth in the quarter was led by continued adoption of Abbott’s i-STAT® handheld system in the U.S. and strong growth internationally.
Established Pharmaceuticals sales increased 7.0 percent on a reported basis in the first quarter, including a favorable 1.3 percent effect of foreign exchange, and increased 5.7 percent on an operational basis. Excluding the impact of Venezuelan operations, which is included in Other, Established Pharmaceuticals sales would have increased 13.0 percent on a reported basis and 11.7 percent on an operational basis in the first quarter.
Key Emerging Markets include Brazil, Russia, India and China, along with several additional emerging countries that represent the most attractive long-term growth opportunities for Abbott’s branded generics product portfolio. Sales in these key geographies increased 15.2 percent on a reported basis and 12.5 percent on an operational basis in the first quarter. Abbott continues to achieve above-market growth in several key geographies driven by commercial initiatives and locally relevant portfolio expansion.
Worldwide Medical Devices sales increased 100.2 percent on a reported basis in the first quarter. On a comparable operational basis, sales increased 4.5 percent. Refer to the final table for a reconciliation of comparable historical revenue.
Worldwide sales of Cardiovascular and Neuromodulation products increased 207.0 percent on a reported basis in the first quarter. On a comparable operational basis, sales increased 2.4 percent. Sales growth in the quarter was led by double-digit growth in Electrophysiology, Structural Heart, and Neuromodulation. In Electrophysiology, Abbott initiated the U.S. launch of its Ensite Precision cardiac mapping system in the first quarter. Growth in Structural Heart was driven by continued double-digit growth of MitraClip®, Abbott’s market-leading device for the treatment of mitral regurgitation, and continued international uptake of Abbott’s PorticoTM device used in treating aortic valve disease and AmplatzerTM AmuletTM used to reduce the risk of stroke by preventing clotting in the left atrial appendage of the heart. In Neuromodulation, strong double-digit growth on a comparable basis was led by several recently launched products for the treatment of chronic pain and movement disorders. As expected, Rhythm Management sales in the U.S. were impacted by continued competitive dynamics in the MRI-conditional category of products. In the quarter, Abbott received FDA approval for MRI-conditional labeling for its Assurity MRI pacemaker and Tendril MRI pacing lead and submitted for FDA approval of MRI-conditional labeling for its Ellipse implantable cardioverter defibrillator (ICD) system, which includes the Tendril MRI pacing lead, and the DurataTM and OptisureTM defibrillation leads.
Worldwide Diabetes Care sales increased 20.2 percent on a reported basis in the first quarter, including an unfavorable 2.7 percent effect of foreign exchange, and increased 22.9 percent on an operational basis. Strong double-digit international sales growth was led by continued consumer uptake of FreeStyle Libre, Abbott’s revolutionary continuous glucose monitoring system. In February, at the Advanced Technologies and Treatments for Diabetes conference, Abbott presented real-world data from more than 50,000 Libre users in Europe. The data demonstrated that FreeStyle Libre users checked their glucose levels an average of 16.3 times per day, more than 3 times the minimum guidelines for traditional finger stick testing. The data also showed that a higher frequency of testing was associated with better diabetes outcomes, including improved glucose levels and a reduction in hypoglycemia.
ABBOTT’S FULL-YEAR EARNINGS-PER-SHARE GUIDANCE REMAINS UNCHANGED
Abbott continues to project earnings per share from continuing operations under Generally Accepted Accounting Principles (GAAP) of $0.92 to $1.02, including amortization and integration expenses related to the acquisition of St. Jude Medical. Projected adjusted diluted earnings per share from continuing operations remains unchanged at $2.40 to $2.50 for the full year 2017.
Abbott forecasts net specified items for the full year 2017 of approximately $1.48 per share. Specified items include acquisition-related expenses, intangible amortization expense, charges associated with cost reduction initiatives and other expenses, partially offset by a gain on the sale of the AMO business.
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