Abbott's Sales on the Short Side

The company's fourth-quarter profit matches estimates.
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Abbott Laboratories

(ABT) - Get Report

reported fourth-quarter earnings that were in line with analysts' estimates, but sales came in about $200 million below what Wall Street had expected.

The drug and device maker's sales were $6.0 billion, compared with analysts' consensus target of $6.2 billion. Sales climbed 7% from $5.7 billion in the year-ago fourth quarter.

On the bottom line, Abbott reported earnings of 63 cents a share in the quarter, a penny above last year and better than its previous guidance of 55 cents to 57 cents a share.

Last month, Abbott said it expected to record a charge of 20 cents a share related to its cost-reduction initiatives, expenses from its decision to repatriate foreign earnings under the American Jobs Creation Act and other costs.

However, that charge was reduced to 13 cents because the company also recorded a benefit of 7 cents a share mainly from the resolution of prior years' tax accrual requirements.

Excluding charges, Abbott said it earned 76 cents a share, within its prior forecast of 75 to 77 cents and meeting the estimates of analysts surveyed by Thomson First Call.

Shares of the Abbott Park, Ill., company rose 3.2% Wednesday morning to $41.35.

"Our balanced, broad-based businesses delivered strong results once again in 2005, in line with our expectations," said Miles D. White, Abbott's chairman and chief executive.

For the year, Abbott reported record worldwide sales of $22.3 billion, thanks to its pharmaceuticals, diabetes, molecular and vascular businesses, but analysts were expecting a bit more from the company, with the consensus projection at $22.46 billion.

Abbott recently agreed to acquire heart-device maker

Guidant's

(GDT)

vascular business if

Boston Scientific

(BSX) - Get Report

prevailed in a bidding war with

Johnson & Johnson

(JNJ) - Get Report

for the company. Early Wednesday, Guidant terminated its initial agreement with J&J and

sided with Boston Scientific.

According to the agreement, Abbott will buy Guidant's entire vascular operation for $4.1 billion, pay Boston Scientific when it reaches certain milestones, and purchase $1.4 billion in Boston's shares. Abbott will also provide the company with a $900 million interest-bearing loan.