Abbott posts double-digit sales for Q4 & FY10, announces layoffs

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While Abbott announced strong double-digit sales for the fourth quarter of 2010 and the full-year 2010, which ended Dec. 31, 2010, the company also announced layoffs of 6 percent of its U.S. workforce, or approximately 1,900 jobs.

For the 2010 fourth quarter, the Abbott Park, Ill.-based company reported an increase in net sales of 13.4 percent to $9.97 billion over the previous year’s fourth quarter. However, its 2010 fourth quarter net earnings decreased by 6.4 percent to $1.44 billion, compared with the 2009 fourth quarter.

For 2010, its net sales also saw double-digit increases of 14.3 percent to $35.17 billion, compared with 2009 net sales. However, Abbott’s net earnings for 2010 dropped 19.5 percent to $4.63 billion in 2010, compared with 2009.

Specifically, for its 2010 coronary stents, the company posted a sales increase of 1.7 percent to $1.05 billion over 2009. However, compared with the 2009 fourth quarter, the coronary stent sales for the fourth quarter dropped 5.1 percent to $248 million.

"Despite a very challenging environment, 2010 was another productive year for Abbott, resulting in strong financial performance," said Miles D. White, chairman and CEO of Abbott. "We also took decisive long-term strategic actions to expand our emerging markets presence and late-stage pipeline."

Yet, the company also announced restructuring plans in its U.S. pharmaceutical business, in “response to changes in the healthcare industry, including U.S. healthcare reform and the challenging regulatory environment.”

As a result of the restructuring, Abbott forecasted that the total specified items associated with this cost reduction initiative over the next several years will equate to approximately $295 million, including transfer of product manufacturing to other facilities. These charges include employee-related costs of approximately $135 million, accelerated depreciation of approximately $65 million and other related exit costs of approximately $95 million mainly related to product transfers. Specified items related to this initiative of approximately $165 million are forecast to occur in 2011, with roughly $140 million projected in the first quarter.