Abbott Laboratories has suffered a setback during the first quarter ended March 2009 on account of lower other income. Its net profit declined by 30.3 per cent to US$ 1,003 million from US$ 1,439 million in the corresponding period of last year. However, its operating earnings went up by 38.6 per cent to Rs 1,471 million from US$ 1,061 million. The other income declined to US$ 10 million from US$ 974 million in the last period. The management declared quarterly dividend of 44 cents per share, an increase of 10 per cent over the prior period.
The company's net sales moved up by 14.6 per cent to US$ 7,698 million from US$ 6,718 million. Sales were reduced by around US$ 60 million as a result of higher Medicaid rebates under US Health Care reform. Excluding this impact, sales would have increased by 15.5 per cent. Its pharmaceutical sales increased by 12.9 per cent to US$ 4,103 million, of which US sales improved by 12 per cent to US$ 1,709 million. Its worldwide diagnostics sales increased by 12.1 per cent to US$ 915 million and that of vascular sales moved up by 3.2 per cent to US$ 747 million. Its nutritional sales reached at US$ 1,320 million, a growth of 11.8 per cent.
The R&D expenditure increased by 12.2 per cent to US$ 730 million from US$ 650 million and its selling, general & administrative expenditure increased only by 4.4 per cent to US$ 2,162 million.
Miles D White, chairman and CEO, said, “We delivered double-digit sales growth across each of our worldwide businesses in the first quarter, reflecting our balance, diversity and strength. We also enhanced our emerging markets presence and pharmaceutical pipeline with the closing of the Solvay Pharmaceuticals acquisition and the announced acquisition of Facet Biotech, augmenting Abbott's long-term growth outlook.”
The acquisition of Solvay Pharmaceuticals is likely to add nearly US$ 3 billion to its 2010 total reported sales and add approximately US$ 500 million to its annual pharmaceutical R&D investment. The company also acquired Facet Biotech Corporation and Starlims Technologies. With these acquisitions, Abbott expects its earnings per share for the full-year 2010 to US$ 4.13 to US$ 4.18. The midpoint of this guidance range reflects continued double-digit growth of approximately 12 per cent over 2009.