Abbott Guidance in Line
Updated from 8:35 a.m.
Abbott Laboratories (ABT) swung to a fourth-quarter loss on acquisition-related costs, but adjusted profits and sales were higher than expected.
The company also guided in line for 2007. Shares were flat in midmorning trading.
The health care giant lost 31 cents a share in the quarter, including 82 cents in charges related to its purchase of Kos Pharmaceuticals. In the year-ago quarter, the company earned 63 cents a share.Excluding items, Abbott would have earned 75 cents a share, at the high end of its guidance of 73 cents to 75 cents. Analysts were expecting the company to earn 74 cents a share. Sales were $6.22 billion, up 2.8%, exceeding the consensus target of $6.18 billion. Including an amendment of a distribution agreement with Boehringer Ingelheim, worldwide sales increased 14.5%, the company said in a press release Wednesday. U.S. pharmaceutical sales sank 18.2% but gained 9.9% including the impact of the Boehringer Ingelheim agreement. Sales of Abbott's drug Humira were up 31% to $370 million in the quarter, with 85% of its sales for the treatment of rheumatoid arthritis. "We are well-positioned to gain share in this large and fast growing biologic market for years to come," said Rick Gonzalez, Abbott's chief operating officer, in the company's conference call Wednesday morning. Last year, the drug received Food and Drug Administration additional approvals to treat psoriatic arthritis and ankylosing spondylitis. Revenue from the antibiotic Biaxin declined 40% to $56 million and Abbott expects sales to be "very modest" going forward. Medical product sales rose 22.7%. This segment includes drug-eluting stent sales of between $35 million and $40 million, the company says. "We completed several major transformational changes that significantly strengthened the mix of our broad-based portfolio as well as the diversity of our strong cash flows," said Miles White, Abbott's chairman and CEO. "The strategic actions we've taken over the last seven to eight years have positioned Abbott for higher growth and consistent double-digit earnings performance." Excluding certain items, the company expects to earn $2.77 to $2.83 in 2007, with earnings of 51 to 53 cents in the first quarter. This includes the sale of Abbott's core laboratory and point of care diagnostic businesses. That deal, with General Electric (GE), is expected to close in the first half of 2007. Sales are expected to grow 13% to 15% for the year, including a return to double digit growth within its diabetes care segment, the company says. Analysts were looking for a profit of $2.79. Shares dipped 6 cents to $53.33 Wednesday.
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