Abbott Laboratories (NYSE:ABT) announced Wednesday strong earnings growth in the second quarter, as sales from its flagship Humira drug continued to grow. The company also beat analysts' estimates, prompting an update to its full year forecast.
For the three months ending June 30, the health care company posted a net income of $1.9 billion, or $1.23 per share, up 50.4% from $1.3 billion, or $0.83 per share, a year ago.
Adjusted for certain one-time items, like a $519 million tax expense, and other restructuring and integration costs stemming from Abbott's 2010 acquisition of Piramal's Healthcare Solutions, net income was $1.8 billion for the quarter, or $1.12 per share.
Revenues for the Abbott Park, Illinois-based company rose 9% year-over-year to $9.6 billion.
Analysts had anticipated earnings of $1.11 per share, on revenues of $9.56 billion.
"Abbott is well-positioned for a strong second half of the year as we remain on track for double-digit EPS growth in 2011," said CEO Miles D. White.
The positive results prompted Abbott to update its full year forecast, and now expects earnings for the year to be in the range of $4.58 to $4.68 per share, in line with what analysts were anticipating. Previously, the company expected earnings of between $4.54 to $4.64 per share.
Revenues from the company's proprietary pharmaceuticals segment increased 13% to $4.2 billion in the quarter, driven by sales of the company's Humira drug, which treats various forms of arthritis, chronic plaque psoriasis, and Crohn's Disease.
Sales from Abbott's "durable growth" business rose 7.5%, driven by sales in nutritionals, which rose 5.4%, point of care diagnostics, which increased 17.3%, and established pharmaceuticals, which rose 10.3%.
Abbott said these divisions often provide favourable results as they are less dependent on significant research and development investments, have minimal patent risk, and operate in generally stable markets, with many products paid for directly by the consumer.
Meanwhile, innovation-driven device sales increased 3.1%, with nearly $290 million in sales from medical optics, a 7.5% increase, and an 18.5% hike in molecular diagnostics. The vascular portion of the segment contributed the most to the division's sales - $835 million - but remained unchanged year-over-year.
Sales from emerging markets were solid, driven by a 40.8% hike in proprietary pharmaceuticals, and a 24.6% boost in established drugs.
"We're also pleased with our growth in emerging markets, as well as the progress of our broad-based pipeline, including several new product approvals, regulatory submissions and clinical trial initiations," White added.
Indeed, Abbott received U.S. FDA approval for several drugs during the quarter, including its AndroGel, which treats men with low testosterone, as well as a palliative treatment for advanced prostate cancer, and for an expanded indication for Rx Acculink to treat carotid artery disease.
Gross margins were 59.8% for the quarter, or 60.2% adjusted for restructuring and integration costs.