Abbott Reports Stronger-than-Expected Sales and Earnings Growth in Second Quarter

AbbottAbbott (NYSE: ABT) announced financial results for the second quarter ended June 30, 2008.
  • Diluted earnings per share, excluding specified items, were $0.84, above Abbott's previously announced guidance range of $0.78 to $0.80, reflecting 21.7 percent growth. Diluted earnings per share under Generally Accepted Accounting Principles (GAAP) were $0.85, up 34.9 percent. This outperformance was driven by higher sales performance across the company, an improved gross margin, and higher ongoing income related to the recently concluded TAP joint venture.
  • Worldwide sales increased 14.8 percent to $7.3 billion, including a favorable 5.9 percent effect of exchange rates.
  • Worldwide pharmaceutical sales increased 16.7 percent driven by double-digit growth in HUMIRA(R), Niaspan(R) and Kaletra(R). Today, Abbott is raising its forecast for global HUMIRA sales to more than $4.3 billion in 2008.
  • Worldwide medical products sales increased 14.7 percent, driven by 17.2 percent growth in global diagnostics sales, and 15.7 percent growth in global vascular sales.
  • Worldwide nutritional products sales growth was led by 21.3 percent growth in international nutritionals, with continued strong performance in emerging markets.
  • Year-to-date, Abbott has received eight major regulatory approvals, including the XIENCE V(TM) drug-eluting stent.

"Abbott achieved another quarter of strong performance across our diverse mix of global businesses, with particularly strong results internationally," said Miles D. White, chairman and chief executive officer, Abbott. "Based on our first-half results, as well as our outlook for the remainder of the year, we're raising our 2008 forecast for both sales growth and earnings per share. We're also confirming our expectation for continued double-digit earnings-per-share growth in 2009."

Based on the company's strong performance year-to-date, and the outlook for the remainder of the year, Abbott is raising both its sales growth and earnings-per-share forecasts for the full-year 2008. The company is raising its earnings-per-share guidance range for the full-year from $3.20 - $3.25 to $3.24 - $3.28, excluding specified items, the midpoint of which reflects growth of approximately 15 percent. In addition, the company is raising its sales forecast to mid-teens growth for the full year. For the first time, Abbott is providing earnings-per-share guidance for the third-quarter 2008 of $0.76 - $0.78, excluding specified items, the midpoint of which reflects growth of approximately 15 percent.

Abbott continues to forecast net specified items for the full-year 2008 of $0.08 per share, primarily associated with cost reduction initiatives and acquired in-process R&D, offset by favorable items including a gain related to the conclusion of the TAP joint venture, a favorable settlement of a prior year's Internal Revenue Service (IRS) tax audit, and a gain on the sale of an equity investment. Including these specified items, projected earnings per share under GAAP would be $3.16 - $3.20 for the full-year 2008.

Abbott forecasts net specified items for the third-quarter 2008 of approximately $0.04 per share, primarily associated with cost reduction initiatives. Including these specified items, projected earnings per share under GAAP would be $0.72 - $0.74 for the third-quarter 2008.

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 68,000 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 http://www.abbott.com.

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