Biotech Values

[DewDiligence]

Abbott Unveils $5B Buyback

[At current prices, the buyback is highly accretive to EPS. Of course, ABT double-checked with drbio before making the program official.]

http://online.wsj.com/article/SB122392735123629705.html

›OCTOBER 14, 2008
By JONATHAN D. ROCKOFF

Abbott Laboratories announced plans to buy back as much as $5 billion in common stock, partly to take advantage of the recent pummeling of stock prices.

Abbott's move announced Monday follows last week's frenzied selloff, the worst week on record for the Dow Jones industrial average. The drug maker's stock price had been 4% higher year-to-date as of Oct. 3 -- and then the broad market took a nosedive, leaving Abbott stock suddenly down 15% in one week.

"It presents a significant buying opportunity," said a spokeswoman for the drug maker, based in Abbott Park, Ill.

As stocks rallied Monday, Abbott's shares gained $4.76, or 9.6%, to $54.21, in 4 p.m. composite trading on the New York Stock Exchange.

Buybacks in general slowed in the second quarter. But companies may step up plans to retire shares after the steep price declines. Since stock markets began falling recently, Hewlett-Packard Co., Microsoft Corp. and Nike Inc. have announced multibillion-dollar repurchase programs.

Abbott bought back more than $1 billion in stock this year as it neared finishing a two-year-old, $2.5 billion buyback program. The company will roll $400 million still unspent from that effort into the new initiative. There is no timetable for new purchases, and Abbott said it can discontinue the program at any time.

Abbott is scheduled to report its third-quarter results Wednesday.‹