A Broadly Positive First QuarterRevenue was up 1.8% year over year to $5.38 billion, slightly below consensus estimates of $5.42 billion. While the soft sales were adversely impacted by a 1.7% currency rate, not much can be said, however, about Abbott's sequential performance, because the company's fourth-quarter report included portions of the spun-off AbbVie business.
As has been the case for some time, Abbott's Nutritional business, which posted a 14% surge in emerging markets, was again the primary growth-driver this quarter. Likewise, the Diagnostics division did well -- growing more than 4% year over year. Management said that the better-than-expected performance was due to strong growth in the company's Point of Care Diagnostic and Core Laboratory products. Unfortunately, though, these solid performances were negated by poor results in Abbott's Medical Devices business, which declined by almost 5% year over year (-3% operationally). This is a concern because the devices business is Abbott's largest division. Not to suggest that management is incapable of growing the business, but weak device sales have also been an issue for larger names like Johnson & Johnson. In fact, this was the reason Johnson & Johnson went after Synthes. While Johnson & Johnson is now posting double-digit devices growth both domestic and internationally, not much of that growth is organic.