Abbott (NYSE:ABT) said today that it’s medical device business posted meager growth of just 1.2% for the 2nd quarter, as the ongoing slump in coronary stents and Medicare reimbursement cuts for diabetes products cut into the divisions top line.
But Abbott’s sales beat expectations for the 1st time in 6 quarters, prompting a boost to its forecast for 2014 earnings, according to a press release.
Abbott reported profits of $466 million, or 30¢ per share, on sales of $5.56 billion for the 3 months ended June 30, representing a bottom-line decline of -2.1% on sales growth of 1.9%.
But, adjusted to exclude 1-time items, earnings per share were 54¢, 3¢ ahead of Wall Street’s forecast and topping Abbott’s own forecast of 50¢ to 52¢.
"We’re ahead of our expectations through the 1st half of the year and are raising our EPS guidance range as we continue to shape the company for long-term growth," chairman & CEO Miles White said in prepared remarks.
Abbott raised its 2014 earnings guidance to $2.19 to $2.29, up from $2.16 to $2.26.
Devices disappoint
Worldwide medical device sales came in at $1.37 billion for the quarter, up 1.2$% compared with Q2 3013, but U.S. medtech sales were down -5.4% to $490 million. Vascular device sales, including the Mitraclip device approved by the FDA last October, rose 1.9% overall to $765 million, but slid -1.9% to $281 million in the U.S.
"In the U.S., strong sales growth in endovascular products, including sales of the Supera peripheral stent, was offset by a decline in drug-eluting stent (DES) sales due to a year-over-year decline in the DES market and market share," Abbott said.
Diabetes sales were down -9.8% overall to $294 million and plunged to $98 million in the U.S., a -27.3% decline.
"As expected, U.S. sales continue to be impacted by CMS reimbursement reductions and market dynamics. Outside of the U.S., Abbott is driving growth in emerging markets and expects to bring its FreeStyle Libre next-generation glucose sensing technology to Europe in the 2nd half of 2014," the company said.
One bright spot was Abbott’s medical optics business, which gained 12.2%, coming in at $314 million overall. In the U.S. the business gained 14.5%, rising to $111 million.
"Sales of cataract products, which represent nearly 70% of medical optics sales, increased strong double digits, outpacing the growth of the global cataract market. This performance was driven by continued share gains of recently launched products, including Tecnis OptiBlue and Tecnis OptiBlue preloaded IOLs in Japan and Tecnis Toric IOL in the U.S. and Japan, as well as further penetration of Abbott’s Catalys precision laser system for cataract surgery. Abbott recently received CE Mark for Tecnis Symfony extended range of vision IOL, which is a new premium lens that is intended to provide patients a continuous range of vision, including far, intermediate and near distances, with reduced incidence of halo and glare," according to the release.
ABT shares were up 1.0% to $41.56 apiece as of about 10:10 a.m. today.