The U.S.-based global health care company reported revenue of $6.3 billion (up 29.9% on a year-over-year basis), beating analysts' expectations by $150 million, and adjusted diluted EPS of 48 cents (up 17.1% on a year-over-year basis), beating analysts' expectations by 5 cents. Analysts estimated EPS of 43 cents on average.
During the first quarter of 2017, the increase in sales was driven by Medical Devices with $2.395 billion (up 100.2% on a year-over-year basis), Established Pharmaceuticals with $950 million (up 7% on a year-over-year basis) and Diagnostics with $1.158 billion (up 3.6% on a year-over-year basis), offset by a 1.7% (on a year-over-year basis) decline in the Nutrition segment that accounted for $1.642 billion in sales.
Worldwide Nutrition sales decreased mainly due to the continued impact on the international performance by difficult conditions Abbott is still facing concerning the infant formula on the Chinese market.
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Strong first quarter of the international adult nutrition subsegment could only partially offset the worldwide Nutrition segment's sales decline.
The increase in sales of the Diagnostics segment was driven by the growing U.S. and international reception of the company’s i-STAT handheld system (point of Care Diagnostics sub segment).
The growth in the sales of Abbott's Established Pharmaceuticals segment was driven by a significant growth of sales in Brazil, Russia, India and China (BRIC) and in many South American countries. BRIC’s sales accounted for approximately 76.8% of the company’s total sales of the Established Pharmaceuticals segment. Abbott says that “excluding the impact of Venezuelan operations, which is included in Other, Established Pharmaceuticals sales would have increased 13.0%” instead of 7%. Sales from other Established Pharmaceuticals decreased by 13.4% on a year-over-year basis.
The sales growth in the Medical Devices segment was driven by a substantial increase of the sales of MitraClip (Structural Heart products), a device designed for the treatment of mitral insufficiency, “and continued international uptake of Abbott's PorticoTM device used in treating aortic valve disease and AmplatzerTM AmuletTM used to reduce the risk of stroke,” the company says.
Abbott Laboratories also provided EPS guidance for full-year 2017.
For full-year 2017, the company expects to report EPS of between 92 cents and $1.02 and non-GAAP EPS of between $2.40 and $2.50.
Abbott declared the 373rd quarterly dividend of 26.5 cents per share in February. The current dividend yield is 2.45%.
The proportion of earnings that Abbott Labs pays out to its shareholders in the form of dividends has been raised by the company for 45 years in a row.
Abbott is part of the Standard & Poor's 500 Dividend Aristocrats Index.
Abbott trades around $43.59 per share on the New York Stock Exchange and outperformed the S&P 500 by 9% year to date.
Disclosure: I have no position in Abbott Laboratories.
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