Abbott Laboratories has posted double digit growth in adjusted net earnings during the third quarter ended September 2012. Though its net sales declined marginally by 0.4 per cent to $9,773 million from $9,817 million in the corresponding period of last year, its adjusted net earnings improved by 12.6 per cent to $2,084 million from $1,850 million. During 2011 the company included $1.5 billion in selling, general and administrative expense for litigation reserves related to previously disclosed litigation Due this its net earnings shown as $303 million in the third quarter of 2011.
Diluted earnings per share, excluding specified items, were $1.30, reflecting 10.2 per cent growth, exceeding Abbott's guidance range. Diluted earnings per share under Generally Accepted Accounting Principles (GAAP) were $1.21, including specified items.
"Abbott delivered another quarter of strong results with ongoing earnings per share up more than 10 per cent, despite a challenging global economy," said Miles D White, chairman and chief executive officer, Abbott. "There were several product launches across pharmaceuticals, vascular and diagnostics, which will contribute to future growth. In addition, we remain on track to separate into two leading health care companies on January 1, 2013.”
Abbott has narrowed its ongoing earnings-per-share guidance for the full-year 2012 to $5.06 to $5.08 from $5.00 to $5.10, reflecting another year of strong performance. 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 AbbVie. 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. The company expect the separation to be completed on January 1, 2013.
Abbott forecasts net specified items for the full-year 2012 of $1.23 per share, primarily associated with separation costs, in-process R&D, acquisition integration and cost-reduction initiatives, partially offset by the resolution of various tax positions from a previous year. Including these net specified items, projected earnings per share under Generally Accepted Accounting Principles (GAAP) would be $3.83 to $3.85 for the full-year 2012. Its forecast of specified items now includes approximately $0.50per share of debt extinguishment costs associated with the planned separation, expected to be incurred in the fourth quarter.