NEW YORK – Abbott Laboratories Inc. (ABT) Thursday posted higher third-quarter profit, helped by surging demand for its new arthritis drug and rising sales of medical devices.
The company, whose shares rose almost 1 percent in early trading, said fourth-quarter earnings would match or slightly exceed Wall Street expectations.
Third-quarter profit from continuing operations, excluding special items, rose 8.7 percent to $835 million, or 53 cents per share, from $768 million, or 49 cents a share, a year earlier.
Including charges related to write-offs of research and the April spinoff of its lower-margin hospital products business, earnings were 51 cents per share in the latest quarter, up from 44 cents a year earlier.
Global sales jumped 10.2 percent to $4.68 billion. Sales would have risen only 8.4 percent if not for favorable foreign exchange factors.
"Pharmaceutical sales growth was up 12 percent, which was consistent with our thinking," Merrill Lynch analyst Katherine Martinelli said in a research report.
Abbott, which also makes nutritional products and diagnostic tests, said growth was fueled by its new arthritis drug, Humira, whose sales almost tripled to $227 million. The injectable medicine is posing stiff competition to Johnson and Johnson's (JNJ) Remicade and Amgen Inc.'s (AMGN) Enbrel.
But sales of thyroid replacement drug Synthroid (search) slipped 6 percent on generic competition, and sales of ulcer treatment Prevacid (search) fell 8 percent as some patients opted for a cheaper over-the counter version of AstraZeneca Plc's popular ulcer treatment Prilosec.
Sales of Abbott medical devices rose 8 percent in the quarter, helped by the acquisition of a company that makes blood glucose monitoring systems.
Abbott, which is based in suburban Chicago, forecast fourth-quarter earnings from continuing operations, excluding special items, of 66 cents to 68 cents per share. Analysts' average forecast is 66 cents, according to Reuters Estimates.
Including special items, Abbott expects a profit of 61 cents to 63 cents per share.
Abbott expects full-year 2004 earnings to grow only 2 percent to 3 percent, but Martinelli said that forecast is a bit conservative, given Humira's popularity and the company's tendency to post its strongest sales in the fourth quarter.
Martinelli expressed enthusiasm for Abbott's experimental drug-coated stent, called Zomaxx, which the company plans to launch in the United States by 2007.
If approved, Zomaxx would compete with blockbuster stents sold by Johnson and Johnson and Boston Scientific Corp. that are also designed to prop open arteries after doctors clear them of plaque.
"Abbott is improving, buoyed by a promising prescription drug pipeline and increasing visibility regarding the company's products in the drug-eluting stent market," Martinelli said.
Abbott shares were up 37 cents to $41.52 on the New York Stock Exchange.