Abbott Laboratories' net profit declined sharply by over 13 per cent during the first quarter ended March 2011 to $864 million from $1003 million in the similar period of last year mainly due to charges in respect of acquisition of Solvay Pharmaceuticals, restructuring in the pharmaceuticals business, change to a calendar year end for international operations. Net earnings excluding specified items worked out to $1419 million as against $1267 million, a growth of 12 per cent. R&D expenditure increased by 27.4 per cent to $930 million from $730 million.
Its net sales increased smartly by 17.4 per cent to $9041 million from $7698 million in the last period, The net sales were driven by double-digit growth in each of Abbott's three major business categories. Emerging markets sales were $2.3 billion, up 38.4 percent from the prior year, with strong growth across all of Abbott's operating divisions and including the impact of acquisitions.
"Stronger-than-expected sales helped us deliver 12 per cent ongoing earnings-per-share growth in the first quarter," said Miles White, chairman and chief executive officer. "Growth was balanced across our three key strategic business categories – Durable Growth, Proprietary Pharmaceuticals and Innovation-Driven Devices, reflecting healthy performance across our global operations, including continued rapid growth in emerging markets."
Diluted earnings per share, excluding specified items, were $0.91, reflecting 12.3 per cent growth. Diluted earnings per share under Generally Accepted Accounting Principles (GAAP) were $0.55, including costs associated with acquisition integration, cost-reduction initiatives and acquired in-process R&D.
Durable Growth Business sales increased 24.3 per cent, driven by strong established pharmaceuticals sales growth, including the contribution from the Solvay Pharmaceuticals and Piramal Healthcare Solutions acquisitions, and International Nutritionals sales growth of 15.8 per cent. Proprietary Pharmaceuticals sales increased 11.7 per cent, including strong performance across several major global brands. Innovation-Driven Device Business sales increased 10.7 per cent, driven by double-digit growth in vascular and molecular diagnostics.
Abbott forecasts specified items for the full-year 2011 of approximately $0.84 per share, primarily associated with acquisition integration/cost reduction initiatives and in-process R&D. Including these specified items, projected earnings per share under Generally Accepted Accounting Principles (GAAP) would be $3.70 to $3.80 for the full-year 2011.
The company declared the quarterly common dividend of 48 cents per share, an increase of 9 per cent over the prior year. The cash dividend is payable May 15, 2011, to shareholders of record at the close of business on April 14, 2011. This marks the 349th consecutive dividend paid by Abbott since 1924.