Abbott sees Q3 double-digit earnings drop

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Abbott experienced a double-digit drop in net earnings for the 2010 third quarter, which ended Sept. 30, compared with the year-over-year earnings, despite an increase in sales, due to acquisition and product recall charges.

The Abbott Park, Ill.-based company reported net earnings of $891 million in the third quarter of 2010, compared with $1.48 billion in the previous-year third quarter, representing a 39.8 percent decrease.

According to Abbott, its diluted earnings per share under generally accepted accounting principles (GAAP) were $0.57, primarily reflecting costs associated with recently announced restructuring actions for the integration of the Solvay Pharmaceuticals acquisition.

However, worldwide sales increased 11.8 percent to $8.7 billion, which the company said was driven by worldwide pharmaceutical sales, which increased 21.7 percent, including the contribution from the Solvay acquisition, as well as worldwide vascular products sales, which increased 18.6 percent.

Sales across most of its product lines increased. The worldwide sales of its coronary stents increased 29.9 percent to $505 million over the third quarter of 2009. Likewise, sales of Abbott’s cholesterol-lowering drug fenofribrate (TriLipix/TriCor) increased by 22.1 percent to $404 million in the third quarter of 2010. Sales of cholesterol-lowering drug niacin (Niaspan) only rose 4.7 percent over the third quarter of 2009 to $225 million. However, sales of its diabetes care products only increased 0.1 percent to $318 million, compared with the 2009 third quarter.

Overall, the company reported its total operating costs and expenses rose by 22.4 percent, from $6.1 billion in the third quarter of 2009 to $7.49 billion in the 2010 third quarter.

While Abbott confirmed its 2010 ongoing earnings-per-share guidance and raised the lower end of its previous guidance range, the company forecasted specified items for the full year of 2010 of approximately $1.24 per share, “primarily associated with acquisition integration, cost reduction initiatives, a litigation reserve, in-process research and development, product recall and withdrawal costs, impairment of sibutramine related intangible asset and the one-time impact of the devaluation of the Venezuelan bolivar on balance sheet translation.”