Abbott (NYSE:ABT) beat expectations today with its second-quarter earnings despite a -84% bottom-line slide.
The Chicago-area healthcare giant posted profits of $283 million, or 16¢ per share, on sales of $6.64 billion for the three months ended June 30, for sales growth of 24.5% compared with Q2 2016.
Adjusted to exclude one-time items, earnings per share were 62¢. Analysts on Wall Street were looking for adjusted EPS of 61¢ on sales of $6.63 billion.
“Halfway through the year, we’re on track with all of our key priorities, including the integration of St. Jude and growth contributions from our pipeline,” chairman & CEO Miles White said in prepared remarks. “We’re also raising our full-year guidance range as we continue to target double-digit ongoing EPS growth.”
Abbott said it now expects to post adjusted EPS of $2.43 to $2.53, up from its prior forecast for $2.40 to $2.50 this year.
ABT shares, which closed up 1.4% at $49.43 apiece yesterday, rose further in pre-market trading today to $50 even, a 1.2% gain.
“This showing is sufficient to support the stock, especially given the improvements we expect for the St. Jude business over the next 12 months,” Cowen analyst Joshua Jennings wrote in a note to investors.
Barclays’ Matthew Taylor said the company ought to be able to consistently grow underlying sales in the mid-single-digit range.
“ABT is our Top Pick and we rate the shares Overweight; we see valuation as reasonable and think revenue acceleration over the next several periods could drive shares higher,” Taylor wrote.
Sales in Abbott’s three core divisions – diagnostics, medical devices and branded generic pharmaceuticals – rose on a reported basis in the quarter, with nutritional products business the only laggard.
Sales in medical devices, Abbott’s largest division, surged about 89% to $2.60 billion.
Global nutrition sales slipped -0.6%.
The company’s pediatric business has been under pressure since last year after China imposed new food safety regulations that required manufacturers to re-register baby formulas with the government.
Net profit from continuing operations more than halved to $270 million, or 15¢ per share due to higher costs.
Material from Reuters was used in this report.
