Abbott Laboratories has suffered a setback during the second quarter ended June 2012 and its net profit declined by 11.2 per cent to $1,725 million from $1,943 million in the corresponding period of last year. Its net sales increased only by 2 per cent to $9,807 million from $9,616 million basically due to lower sales of Trilipix/TriCor, Kaletra, Niaspan and Synthroid. With lower net profit, its earnings per share declined to $1.08 from $1.23 in the last period.
Abbott is confirming its ongoing earnings-per-share guidance for 2012 of $5.00 to $5.10, reflecting another year of expected strong performance. Including specified items, projected earnings per share under GAAP would be $4.29 to $4.39 for the full-year 2012.
"Abbott continues to deliver strong results as we remain on track to separate into two leading health care companies," said Miles D. White, chairman and chief executive officer, Abbott. "During the second quarter, we launched and advanced numerous projects in our promising, broad-based pipeline and achieved key milestones in the separation process."
Worldwide nutritionals sales increased 8.3 per cent in the quarter, excluding an unfavourable 2.0 per cent effect of foreign exchange. US nutritionals increased 13.1 per cent, with US paediatric nutritionals sales growth of 25.3 per cent on continued share gains of our infant formula, Similac, and continued double-digit growth of PediaSure. US adult nutritionals grew 3.0 per cent, driven by strong growth of Ensure and Glucerna. Several new paediatric and adult nutritional products were launched in the second quarter. international nutritionals increased 4.5 per cent, excluding an unfavourable 3.5 per cent effect of foreign exchange, driven by continued growth of both the paediatric and adult segments, partially offset by the transition to a direct distribution model in certain markets.
Global sales of Core Laboratory Diagnostics increased 8.6 per cent, excluding an unfavourable 5.3 per cent effect of foreign exchange, driven by 15.3 per cent growth in the US due to continued growth of ARCHITECT and PRISM, and 7.2 per cent international growth, excluding an unfavourable 6.5 per cent effect of foreign exchange. Point of Care Diagnostics also drove global Diagnostics sales growth in the quarter.
Worldwide Proprietary Pharmaceuticals sales increased 9.3 per cent, excluding an unfavourable 4.4 per cent effect of foreign exchange, driven by strong growth across a number of key franchises including HUMIRA, AndroGel and Creon.
For the first half ended June 2012, Abbott's net sales increased by 3.3 per cent to $19,264 million from $18,657 million in the similar period of last year. Its net profit improved by 5.7 per cent to $2,967 million from $2,806 million. Its US sales increased by 6 per cent to $7,901 million and its international sales improved by 6.5 per cent to $11,363 million. The sales of nutritionals in US increased by 12 per cent to $1,448 million. Humira registered strong growth of 25.6 per cent in US during the first half ended June 2012. However, sales of Trilipix/TriCor, Kaletra and Niaspan declined by 8.4 per cent, 13.6 per cent and 15 per cent respectively.
In October 2011, Abbott announced plans to separate into two publicly traded companies, one in diversified medical products and the other in research-based pharmaceuticals. The diversified medical products company will consist of Abbott's branded generic pharmaceuticals, devices, diagnostics and nutritionals businesses, and will retain the Abbott name. The research-based pharmaceutical company, named AbbVie, will include Abbott's current portfolio of proprietary pharmaceuticals and biologics.
The transaction is intended to take the form of a tax-free distribution to Abbott shareholders of a new publicly traded stock for the new pharmaceutical company. The stock distribution ratio will be determined at a future date. It is expected that the two companies will each pay a dividend that, when combined, will at least equal the current Abbott dividend at the time of separation.