Abbott Laboratories (ABT) reported fourth quarter earnings of $1.18 per share, a cent above the Zacks Consensus Estimate of $1.17. Earnings increased 11.3% from the year-ago period.
For the full year, Abbott reported earnings of $3.72, up 12% from the year-ago period. Full year results were in-line with the company’s guidance of $3.70 – $3.72.
Fourth quarter revenues grew 10.6% to $8,790 million. Revenues were positively impacted by foreign exchange (Fx) fluctuations (2.4%). Full-year revenues were $30.8 billion, up 4.2%.
Pharmaceutical division revenues for the fourth quarter were $4,849 million, up 5.2% and positively impacted by about 2.5% by Fx. Strong Humira and lipid franchise sales were offset by a weak performance of Depakote, which is facing intense generic competition. The lipid franchise posted sales of $673 million during the quarter. Abbott reported a favorable impact on Niaspan prescription trends following the release of data from the Arbiter-6 HALTS at the American Heart Association in November 2009.
Going forward, the approval of Certriad, potentially in the first half of 2010, should help drive lipid franchise sales. Certriad is a fixed-dose combination of TriLipix and Crestor which has been co-developed with AstraZeneca (AZN). Full-year Pharmaceutical division revenues were $16.5 billion, down 1.3% mainly due to Fx headwinds.
Meanwhile, Humira recorded growth in both U.S. (3%) and international markets (7.4%) during the fourth quarter. Humira exited 2009 with a 42% share of the US anti-TNF (tumor necrosis factors) market. Fourth quarter sales increased to 23% to $1.7 billion, with full year sales coming in at $5.5 billion, up 21%.
The Nutritional business posted fourth quarter revenues of $1,433 million in the quarter, up 8.8%. The segment is enjoying strong growth in key emerging markets, including Latin America and Asia. Full year Nutritional revenues increased 7.3% to $5.3 billion. Abbott Diagnostics posted sales of $975 million in the quarter, representing an increase of 8.8%. Full year Diagnostics revenues increased 0.1% to $3.6 billion.
The Vascular division continued to perform well, with fourth quarter revenues increasing 9.1% to $723 million. XIENCE V should continue performing well thanks to recent approvals in countries like Japan, China and Mexico. Full year Vascular division sales increased 20% to $2.7 billion. Meanwhile, other division sales totaled $810 million, representing growth of 74.6%. For the full year, other division sales increased 31.1% to $2.7 billion.
Management provided better-than-expected guidance for 2010. The company expects earnings in the range of $4.20 to $4.25. The current Zacks Consensus Estimate for 2010 is $4.19. The company also declared a quarterly dividend of 40 cents per share.
We currently have a Neutral recommendation on Abbott. Abbott’s strong business segments, contributions from recent acquisitions and impressive late-stage pipeline should help fortify long-term earnings growth.
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