Abbott Labs Meets

Updated from 9:53 a.m. EDT

Abbott Laboratories ( ABT) offered a mixed bag of news in its second-quarter earnings release, showing double-digit percentage sales growth and matching Wall Street expectations, but guiding lower for the third quarter.

Using generally accepted accounting principles, the company announced that it had second-quarter net operating income of $634.9 million, or 40 cents a share, which is nearly quadruple the $179.1 million, or 11 cents a share, it had a year ago. Both periods included a number of charges and items, however, and without them the company would have earned $854.5 million, or 54 cents a share, in line with Wall Street consensus and up from $752.3 million, or 47 cents a share, a year ago.

Abbott said worldwide sales rose 14% to $4.7 billion from the $4.1 billion it had a year ago, driven by strong sales growth across its suite of branded products. Pharmaceutical sales were up 14.4%, with global sales of eight of its drugs growing in excess of 10%. Humira, Abbott's rheumatoid arthritis treatment, was a notable bright spot, with U.S. sales of $138 million, more than double the $65 million it had a year ago.

But while the company's portfolio of products fires on all cylinders, the company's third quarter will sputter in at the low end of current Wall Street expectations. The company updated its third-quarter earnings guidance, giving a range between 51 and 53 cents a share, which is below the current expectation of 54 cents. For the full year, the company said earnings would come in between $2.25 and $2.30, with analysts expecting $2.28 a share.

But shares of the drugmaker were up 38 cents, or 0.9%, to $40.66 in Friday trading, undoubtedly helped by positive news on atrasentan, a prostate cancer treatment the company hopes to sell under the brand name Xinlay.

Abbott said in a statement released before its earnings results that it will submit a new drug application for atrasentan with the Food and Drug Administration before the end of 2004, which is a year ahead of schedule. Atrasentan is considered a promising drug for Abbott and currently in phase 3 testing.

In February 2003, Xinlay had a major setback when the drug showed insignificant improvement as a prostate cancer treatment. But a month ago, the company unveiled new data from a number of late-stage trials, arguing that the drug was far more effective in patients at an advanced stage of the disease.

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