ABBOTT PARK, Ill., Oct. 14 /PRNewswire-FirstCall/ -- Abbott today announced financial results for the third quarter ended Sept. 30, 2009.
"Abbott is performing well, generating higher-than-expected earnings growth in the third quarter," said Miles D. White, chairman and chief executive officer, Abbott. "During the quarter, we announced several acquisitions that support our long-term growth strategy. These acquisitions add to our diverse mix of global businesses, with new technologies, established products and emerging market infrastructure that will help us deliver sustainable industry-leading growth. In particular, the acquisition of Solvay Pharmaceuticals will further diversify our global pharmaceuticals business."
The following is a summary of third-quarter 2009 sales.
Business Highlights
Abbott raises guidance for full-year earnings per share
Based on the company's continued strong results year to date, including third-quarter results that were ahead of expectations, Abbott is raising its ongoing earnings-per-share forecast for the full-year 2009 to $3.70 to $3.72 from its previous guidance range of $3.65 to $3.70. The midpoint of this 2009 guidance range reflects 11.7 percent growth over 2008 ongoing earnings per share.
Abbott is forecasting earnings per share under GAAP above the full-year ongoing earnings per share for 2009.
Abbott declares quarterly dividend; double-digit increase over prior year
On Sept. 17, 2009, the board of directors of Abbott declared the company's quarterly common dividend of 40 cents per share, an increase of 11 percent over the prior period. The cash dividend is payable Nov. 15, 2009, to shareholders of record at the close of business on Oct. 15, 2009. This marks the 343rd consecutive dividend paid by Abbott since 1924.
About Abbott
Abbott is a global, broad-based health care company devoted to the discovery, development, manufacture and marketing of pharmaceuticals and medical products, including nutritionals, devices and diagnostics. The company employs more than 72,000 people and markets its products in more than 130 countries.
Abbott's news releases and other information are available on the company's Web site at www.abbott.com. Abbott will webcast its live third-quarter earnings conference call through its Investor Relations Web site at www.abbottinvestor.com at 8 a.m. Central time today. An archived edition of the call will be available after 11 a.m. Central time.
Some statements in this news release may be forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. Abbott cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated in the forward-looking statements. Economic, competitive, governmental, technological and other factors that may affect Abbott's operations are discussed in Item 1A, "Risk Factors," to our Annual Report on Securities and Exchange Commission Form 10-K for the year ended Dec. 31, 2008, and are incorporated by reference. Abbott undertakes no obligation to release publicly any revisions to forward-looking statements as a result of subsequent events or developments.
Questions & Answers
Q1) What drove the operational growth of worldwide pharmaceutical sales?
A1) International pharmaceutical operational sales increased 15.1 percent, excluding an 11.3 percent negative impact from exchange. Internationally, operational growth for HUMIRA was 41.5 percent, with reported sales of $791 million, in line with our previous expectations. International anti-TNF market growth trends remain strong, and HUMIRA maintains a market-leading position in many of the international markets, including the number one share position in Western Europe.
U.S. pharmaceutical sales increased 3.9 percent, excluding the expected decline of Depakote sales due to generic competition, which reduced reported U.S. pharmaceutical sales growth by 10.5 percentage points.
U.S. pharmaceutical sales were led by HUMIRA, which increased 21.3 percent to $700 million. Underlying demand for HUMIRA remains strong across all three major indications. Given the performance of HUMIRA year-to-date, we're raising our global HUMIRA forecast to 28 to 30 percent operational sales growth for the full-year 2009, excluding the negative impact of foreign exchange (18 to 20 percent reported sales growth).
In our lipid franchise, Niaspan sales were $215 million, up 10.6 percent. TriCor/TRILIPIX franchise sales were $330 million, similar to the prior year. Sales growth this quarter was impacted by the comparison to the prior year as well as a temporary reduction in net price associated with broader managed care access and expanded patient assistance programs. Total prescriptions for the TriCor/TRILIPIX franchise continue to grow in the mid-single digits, exceeding the growth rate of the cholesterol market. The launch of TRILIPIX is on-track, driving steady market share gains. During the quarter, we initiated a consumer outreach program and we expanded our relationship with AstraZeneca to include the co-promotion of TRILIPIX. These actions are expected to drive future lipid franchise sales growth.
Q2) What drove the 16.2 percent operational increase in worldwide medical products sales and the 13.1 percent operational increase in worldwide nutritional products sales?
A2) Medical products operational sales increased 16.2 percent, excluding a 5.1 percent negative impact from exchange. This includes the second full quarter of sales from Advanced Medical Optics (AMO), which was acquired during the first quarter of 2009. Strength in the quarter reflects 8 percent operational growth in worldwide vascular sales and continued double-digit growth in Abbott's molecular and point of care diagnostics businesses.
Vascular sales were driven by the continued successful uptake of XIENCE V, which remains the number one drug-eluting stent (DES) in the United States and Europe. XIENCE platform share, which includes XIENCE V and Promus, accounts for more than half of the U.S. market. Recent XIENCE V clinical data presented at the Transcatheter Cardiovascular Therapeutics (TCT) meeting is expected to drive market share gains for the XIENCE platform.
Worldwide nutritional products operational sales increased 13.1 percent, excluding 3.3 percent negative exchange. International nutritional product operational sales increased nearly 22 percent, reflecting strong growth in key emerging markets, including Latin America and Asia.
Q3) What was the third-quarter gross margin ratio?
A3) The gross margin ratio before and after specified items is shown below (dollars in millions):
The adjusted gross margin ratio was 57.1 percent, consistent with our previous forecast, reflecting better operating performance of the diagnostic and nutrition businesses offset by lower Depakote sales and the negative impact of foreign exchange on the ratio.
Q4) What drove SG&A and R&D investment in the quarter?
A4) Both SG&A and R&D were in line with our forecasts. Ongoing R&D expense reflects the timing of investment in our broad-based pipeline, including programs in vascular devices, biologics, neuroscience, oncology and HCV. Ongoing SG&A expense was 25.4 percent of sales, in line with our forecast for SG&A leverage in 2009, particularly in the second half of this year. We are forecasting a reduction in full-year SG&A as a percentage of sales of more than 100 basis points compared to 2008 and R&D investment of approximately 9 percent of sales for the full-year 2009.
Q5) What was the tax rate in the quarter?
A5) The tax rate this quarter was 17.8 percent, in line with our previous forecast. The reported tax rate is reconciled to the ongoing rate below (dollars in millions):
Q6) How did specified items affect reported results?
A6) Specified items impacted third-quarter results as follows:
There were net favorable specified items in the quarter. The patent settlement relates to a favorable DES patent settlement that was reached during the quarter. The favorable impact of this settlement has been excluded from ongoing earnings per share of $0.92.
Acquisition related is primarily associated with costs related to the acquisition of Advanced Medical Optics (AMO), which closed during the first quarter of 2009. Cost reduction initiatives include actions to improve efficiencies, including the previously announced efforts in the core laboratory diagnostic business.
The pre-tax impact of specified items by Consolidated Statement of Earnings line item is as follows (dollars in millions):
Q7) What are the key areas of focus in Abbott's broad-based pipeline?
A7) Abbott is advancing leading-edge scientific discoveries across the company, including:
SOURCE Abbott
CONTACT: Financial, John Thomas, +1-847-938-2655, or Larry Peepo,
+1-847-935-6722, or Tina Ventura, +1-847-935-9390, or Media, Melissa Brotz,
+1-847-935-3456, or Scott Stoffel, +1-847-936-9502, all of Abbott
Web site: http://www.abbott.com/
