›Wed Oct 14, 2009 11:47am EDT By Ransdell Pierson and Lewis Krauskopf
NEW YORK, Oct 14 (Reuters) - Abbott Laboratories Inc (ABT) said its third-quarter profit rose 37 percent on strong demand for its Humira arthritis drug and nutritional products, as well as gains from a settlement with Medtronic Inc (MDT).
The profit reported on Wednesday topped Wall Street forecasts, and revenue was in line with targets, a relief for investors on the heels of a disappointing sales report from rival diversified healthcare company Johnson & Johnson.
Shares of Abbott rose 3 percent as the company also nudged up its full-year profit forecast.
"It was a very solid quarter, and the most important thing is that Humira relieved concerns among investors that it might stall, from its previous rapid growth," said Morningstar analyst Damien Conover.
Conover said Humira's continued growth probably gave Abbott confidence to raise its 2009 profit forecast and that other aspects of the earnings report were much as expected.
Abbott said it had earned $1.48 billion, or 95 cents per share, up from $1.09 billion, or 69 cents per share, a year earlier. The results included a gain of $287 million from a previously announced settlement with Medtronic over heart stent technology.
Excluding special items, the third-largest U.S. healthcare company by market value earned 92 cents per share. On that basis, analysts on average expected 90 cents, according to Thomson Reuters I/B/E/S.
Sales rose 3.5 percent to $7.76 billion, in line with Wall Street expectations. Revenue would have risen 8.4 percent if not for the stronger dollar, which lowers the value of overseas sales.
Global prescription drug sales fell 1.6 percent to $4.1 billion, hurt by new generic forms of Abbott's Depakote anti-seizure medicine.[In constant currencies, the pharma unit’s sales rose 3.9% YoY; excluding Depakote, which went generic in 2008, the pharma unit’s sales rose 9.3% YoY in constant currencies, driven by a 15.1% increase ex-US.] That represents an improvement over the 4.3 percent decline seen in the second quarter.
Humira sales rose 24 percent to $1.49 billion[+32% (!) in constant currencies], about $30 million ahead of Wall Street expectations, according to the average estimate of five analysts polled by Thomson Reuters I/B/E/S.
Sales of Abbott's drug-coated stents, including Xience, rose 10 percent to about $330 million in the quarter. Company officials predicted Xience, already the market leader, will capture greater share in coming months due to new data[#msg-42404723, #msg-41731638, #msg-41855797]showing advantages over rival stents used to prop open heart arteries that have been cleared of plaque.
Abbott's nutritionals business continued to show strength, with sales rising 9.8 percent to $1.39 billion despite the stronger dollar. The company, which is steadily expanding this segment, announced in July it would pay $130 million for the nutrition businesses of Wockhardt Ltd, whose brands are sold in India.
The Wockhardt transaction is among five significant deals for Abbott this year, as the company aims to lessen its dependence on Humira for future earnings growth.
"The nutritionals business continues to do very well," said Conover. He speculated that Abbott was trying to "entrench" those products in fast-growing emerging markets and would later move aggressively to introduce lucrative prescription drugs there.
Last month, Abbott said it planned to buy Solvay SA's pharmaceuticals unit for $6.6 billion in cash. The deal, the second-biggest in Abbott's history, would give it a number of new medicines in late stages of testing, including treatments for Parkinson's disease and other neurological conditions.
…Citing strong results so far this year, Abbott nudged up its full-year profit forecast to between $3.70 and $3.72 per share. Its earlier view was $3.65 to $3.70.‹
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