Abbott Labs 3Q net income rises; lays off 550
WASHINGTON (AP) — Drug and medical device maker Abbott Laboratories reported a higher third-quarter profit Wednesday, edging past analyst expectations, even as revenue slipped. The company, which is in the process of spinning off some of its businesses, also laid off 550 employees globally and said it plans to eliminate several hundred additional positions next year.
Spokeswoman Adelle Infante said that the layoffs were in Abbott's nutrition, medical devices, established pharmaceuticals and molecular diagnostics divisions.
The company recorded a $478 million pretax restructuring charge during the quarter for costs tied to earlier job cuts and those anticipated for 2013.
In January Abbott announced that it would lay off 700 workers as part of its ongoing restructuring efforts. At that time the company said that most of those layoffs would impact employees who made its heart stents and diagnostic tests.
Abbott has been restructuring its operations for several years, laying off about 1,900 pharmaceutical division employees in early 2011. The company currently has 91,000 employees worldwide.
For the three months through Sept. 30, Abbott's net income jumped to $1.94 billion, or $1.21 per share, from $303 million, or 19 cents per share, a year ago. In 2011, Abbott's results included expenses from litigation, acquisitions and cost-cutting efforts.
Excluding one-time items in the latest quarter, profit came to $1.30 per share. Revenue fell less than 1 percent to $9.77 billion from $9.82 billion.
Analysts polled by FactSet predicted earnings per share of $1.28, but higher revenue of $9.94 billion.
The quarter's results benefited from a 31 percent reduction in sales and administrative expenses, which came to $2.92 billion.
In afternoon trading, shares of the company fell $2.92, or 4 percent, to $69.22. Over the past year, the stock has traded in a range of $51.53 to $72.47.
Abbott said revenue would have increased 4 percent without the negative impact of changes in currency exchange rates. Stripping out the effect of currency changes, revenue from the branded drugs business rose 6.4 percent, while for the division that sells products including nutritional formula, revenue rose 6.3 percent. Those are Abbott's largest divisions by revenue.
On the same basis, quarterly sales of the company's top seller, the anti-inflammatory drug Humira, rose 15.7 percent to $2.33 billion.
The drug and medical device company plans to spin off its pharmaceutical business into a separate company by the end of 2012. The new company, AbbVie, will focus solely on branded drugs, including Humira.
The split is meant to free the North Chicago, Ill., company from the risks and obligations of developing innovative pharmaceutical drugs, leaving it with a more predictable business built around nutritional formula, generic drugs and heart stents.
The company narrowed its full-year 2012 profit forecast to between $5.06 and $5.08 per share from $5 to $5.10 per share. Analysts expect $5.06 per share, on average.