ABBOTT PARK, Ill., July 15 /PRNewswire-FirstCall/ -- Abbott today announced financial results for the second quarter ended June 30, 2009.
"We achieved our performance goals for the quarter, with results at the high end of our previous expectations," said Miles D. White, chairman and chief executive officer, Abbott. "Our diverse mix of market-leading products and global businesses delivered double-digit operational sales growth, with strong performance from our key growth drivers."
The following is a summary of second-quarter 2009 sales.
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.
Abbott is also providing earnings-per-share guidance for the third-quarter 2009 of $0.88 to $0.90, excluding specified items. The midpoint of this guidance reflects nearly 13 percent growth over the prior year third quarter. Abbott forecasts specified items for the third-quarter 2009 of approximately $0.05 per share, primarily associated with previously announced acquisitions and cost reduction initiatives. Including these specified items, projected earnings per share under GAAP would be $0.83 to $0.85 for the third-quarter 2009.
Abbott declares quarterly dividend; double-digit increase over prior year
On June 12, 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 Aug. 15, 2009, to shareholders of record at the close of business on July 15, 2009. This marks the 342nd 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 second-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.
-- Private Securities Litigation Reform Act of 1995 --
A Caution Concerning Forward-Looking Statements
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) Excluding Depakote, U.S. pharmaceutical sales increased more than 9 percent. As expected, U.S. pharmaceutical sales reflected the impact of generic competition for Depakote. This resulted in a $306 million decline in Depakote sales in the second quarter, reducing reported U.S. pharmaceutical sales growth by nearly 15 percentage points.
U.S. pharmaceutical sales were led by HUMIRA, with sales of $635 million, up 20.9 percent. Underlying demand for HUMIRA remains strong, and share gains occurred across all three major indications in the quarter. The lipid franchise continues to perform well, with TriCor/TRILIPIX sales up more than 9 percent and Niaspan sales up nearly 7 percent, both exceeding the market growth rate.
International pharmaceutical operational sales increased 13.8 percent, excluding a 16.7 percent negative impact from exchange. Internationally, operational growth for HUMIRA was 44 percent, with sales of $676 million, in line with our expectations. There was a 24-percentage point negative impact of exchange on international HUMIRA sales. 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. Kaletra also performed well internationally, with operational growth of nearly 14 percent.
Q2) What drove the 27.0 percent operational increase in global medical products sales and strong global nutritional products sales?
A2) Medical products operational sales increased 27.0 percent, excluding a 9.5 percent negative impact from exchange. This includes the first full quarter of sales from Advanced Medical Optics (AMO), which was acquired during the first quarter of 2009. Strength in the quarter reflects 43 percent operational growth in worldwide vascular sales and continued double-digit growth in Abbott's molecular diagnostics business.
Vascular sales were driven by the continued successful uptake of XIENCE V, which remains the number one DES in the United States and Europe. XIENCE platform share, which includes XIENCE and Promus, is now more than half of the U.S. market. U.S. DES penetration is in the mid-70s and percutaneous coronary intervention (PCI) volumes increased in the low-single digits from the second quarter of last year.
Worldwide nutritional products operational sales increased more than 9 percent, excluding 5.2 percent negative exchange. This reflects continued strong growth in key emerging markets, including Latin America and Asia. U.S. nutritional sales increased 10.0 percent, driven by strong market share gains in the infant nutritional business.
Q3) What was the second-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 59.2 percent, an improvement of 80 basis points from the prior year. This gross margin expansion was driven by improved operating performance of the diagnostic and nutrition businesses, and the impact of foreign exchange. This occurred despite the negative impact from lower Depakote sales.
Q4) How did R&D and SG&A investment compare to the company's guidance?
A4) Both SG&A and R&D were in line with our forecast for the quarter. Ongoing R&D expense, excluding specified items and the impact of foreign exchange, was up nearly 6 percent, reflecting continued investment in our pipeline, including programs in vascular devices, biologics, neuroscience, oncology and HCV. Ongoing SG&A expense, excluding specified items and the impact of foreign exchange, was up nearly 5 percent, in line with our forecast for significant SG&A leverage in 2009. 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) What was the tax rate in the quarter?
A5) The tax rate this quarter was 17.8 percent, in line with the previous forecast.
Q6) How did specified items affect reported results?
A6) Specified items impacted second-quarter results as follows:
Acquisition related is primarily associated with acquisition costs related to 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/
