- Adjusted EPS Growth of 15.9 Percent (GAAP EPS Growth of 53.3 Percent) -
- Confirms Double-Digit EPS Guidance Range for 2009 -
- Increased 2009 Dividend by 11 Percent -
ABBOTT PARK, Ill., April 15 /PRNewswire-FirstCall/ -- Abbott today announced financial results for the first quarter ended March 31, 2009.
"Our first-quarter results demonstrate again the value of a well-balanced and highly diverse portfolio of businesses capable of top-tier earnings performance in even the most difficult market conditions," said Miles D. White, chairman and chief executive officer, Abbott. "This quarter our collective businesses delivered mid-teens earnings-per-share growth, including continued strong double-digit operational sales growth in global nutritionals, global vascular and international pharmaceuticals. We also saw significant profitability improvements in our vascular and diagnostics segments."
The following is a summary of first-quarter 2009 sales.
The following is a summary of Abbott's first-quarter 2009 sales for selected products.
The following summarizes the impact of foreign exchange on international sales for selected products.
Business Highlights
Abbott confirms double-digit earnings-per-share growth outlook for 2009
Abbott is confirming previously issued earnings-per-share guidance for the full-year 2009 of $3.65 to $3.70 under both Generally Accepted Accounting Principles (GAAP) and on a non-GAAP, or adjusted basis. The midpoint of this 2009 guidance range reflects double-digit growth over 2008 earnings per share.
For the first time, Abbott is providing earnings-per-share guidance for the second-quarter 2009 of $0.87 to $0.89, excluding specified items. Abbott forecasts net specified items for the second-quarter 2009 of approximately $0.07 per share, primarily associated with previously announced acquisitions and cost reduction initiatives. Including these specified items, projected earnings per share under GAAP would be $0.80 to $0.82 for the second-quarter 2009.
Abbott declares quarterly dividend; double-digit increase over prior year
On Feb. 20, 2009, the board of directors of Abbott declared the company's quarterly common dividend of 40 cents per share, an 11 percent increase over the prior year. The cash dividend is payable May 15, 2009, to shareholders of record at the close of business on April 15, 2009. This marks the 341st 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 first-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 impacted the growth of pharmaceutical sales, including HUMIRA?
A1) International pharmaceutical operational sales increased 12.4 percent, excluding a 12.1 percent negative impact from exchange. Internationally, operational growth for HUMIRA was nearly 50 percent, in line with recent quarters, and in line with our expectations. However, there was a 20-percentage point negative impact of exchange on international HUMIRA sales, which was more unfavorable than our original estimate. International anti-TNF market growth trends remain strong, and HUMIRA maintains a market-leading position in many of the international markets. Synthroid, Lupron and Norvir also contributed to the international growth, as well as a number of other established products.
As expected, U.S. pharmaceutical sales reflected the first quarter impact of generic competition for both forms of Depakote; Depakote DR and Depakote ER. This resulted in a $230 million decline in Depakote sales in the first quarter, reducing U.S. pharmaceutical sales growth by more than 13 percentage points. Total U.S. pharmaceutical sales were approximately $150 million below our expectations for the quarter, due to somewhat slower-than-expected market growth in certain segments, including self-injectable anti-TNF's, and a related one-time reduction in customer purchases. HUMIRA accounted for somewhat more than half of the $150 million. In the U.S., HUMIRA continues to grow significantly faster than the market and continues to gain market share. Total U.S. HUMIRA prescriptions increased approximately 18 percent in the first quarter compared to the prior year, indicating strong underlying demand.
For the full-year 2009, Abbott is forecasting global HUMIRA operational sales growth of 25 to 30 percent, excluding the negative impact of exchange, and global HUMIRA reported sales growth of 15 to 20 percent, including exchange. This includes forecasted international reported sales growth of more than 20 percent, including an expected negative impact from exchange approaching 20 percent, and U.S. HUMIRA growth in the low double-digits. Our updated full-year HUMIRA forecast captures current market dynamics as well as negative exchange rate trends.
Also in the quarter, we launched TRILIPIX, our next generation fenofibric acid. Uptake has been driven by the safety and efficacy data and labeled indication for use of TRILIPIX in combination with statins. Also, we are now forecasting an earlier-than-expected FDA submission for the fixed-dosed combination of TRILIPIX and CRESTOR. This submission is now expected in the third quarter of this year.
Q2) What drove the 15.6 percent operational increase in global medical products sales and strong global nutritional products sales?
A2) Medical products operational sales increased 15.6 percent, excluding 6.8 percent negative exchange. Strength in the quarter reflects more than 40 percent growth in worldwide vascular sales and continued double-digit growth in the molecular business.
Vascular sales were driven by the continued successful uptake of XIENCE V. We have seen continued steady improvement in the U.S. DES market, with DES penetration in the mid-70s, up more than 10 percentage points from the first quarter of last year. Percutaneous coronary intervention (PCI) volumes were up in the low-single digits from the first quarter of last year.
Worldwide nutritional products operational sales increased nearly 11 percent, excluding 4.2 percent negative exchange. This reflects continued strong growth in key emerging markets, including Latin America and Asia, where Abbott recently opened a new 500,000 square foot state-of-the-art nutritionals manufacturing facility in Singapore. This plant will support the growing demand in the Asian markets. U.S. nutritional sales increased 4.2 percent.
Q3) What was the first-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 58.1 percent, an improvement of 130 basis points from the prior year. Improvement was driven primarily by improved operating performance of the diagnostic and vascular businesses, and occurred despite the negative impact from lower Depakote sales. The gross margin ratio in the quarter was in line with our previous guidance.
Q4) How did R&D and SG&A investment compare to the company's guidance?
A4) Both SG&A and R&D as a percentage of sales were in line with our forecast for the quarter. Ongoing R&D expense, excluding specified items, was 9.5 percent of sales, reflecting continued investment in our pipeline, including programs in vascular devices, biologics, neuroscience, oncology and HCV. Ongoing SG&A expense, excluding specified items, was somewhat less than 29 percent of sales, a decline from the prior year. We expect to deliver significant SG&A leverage in 2009, as we are forecasting a reduction in full-year ongoing SG&A as a percentage of sales of more than 100 basis points compared to 2008.
Q5) How did specified items affect reported results?
A5) Specified items impacted first-quarter results as follows:
Gain on the derecognition of a contingent liability relates to the conclusion of the TAP joint venture, as product approvals occurred during the quarter that eliminated the contingency. Acquisition integration relates to the acquisition of Advanced Medical Optics (AMO), which closed during the quarter. Litigation settlement relates to previously announced litigation that was resolved during the first quarter. Cost reduction initiatives include actions to improve efficiencies, including the previously announced efforts in the core laboratory diagnostic business. Other costs are primarily associated with a delayed product approval.
The pre-tax impact of specified items by Consolidated Statement of Earnings line item is as follows (dollars in millions):
Q6) What was the tax rate in the quarter?
A6) The tax rate this quarter, excluding specified items, was 17.8 percent, in line with the previous forecast. We continue to forecast a full-year 2009 tax rate of 17.5 to 18.0 percent. The reported tax rate is reconciled to the ongoing rate below:
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:
CONTACT: Financial, John Thomas, +1-847-938-2655, or Larry Peepo,
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Web site: http://www.abbott.com/