Health-care giant Abbott Laboratories (NYSE: ABT ) , which split from its branded pharmaceutical division, AbbVie in Jan. 2013, delivered rather underwhelming fourth-quarter results before the opening bell this morning, highlighted by negative foreign currency translation and a mid-summer sales disruption in its nutritional-products segment.
For the quarter, Abbott reported an increase in revenue of 3.3%, excluding foreign currency translation, to $5.66 billion; however, this figure dipped to an increase of just 0.4% when you include that effect. Despite a lack of meaningful sales growth, adjusted profit increased 21%, to $0.58 per share, from $0.48 in the year-ago period as its adjusted operating margin expanded 110 basis points due, primarily, to improvements in its diagnostics and nutrition segment.
As you might imagine, Abbott's four operating segments delivered mixed results.
Adjusted for negative currency effects, Abbott's diagnostics segment and medical device division were the highlights, up 5.9% and 2%, respectively. Within its diagnostics segment, a nearly 6% increase in core laboratory sales due to emerging market growth, and a 13.7% increase in point-of-care sales primarily from U.S. hospitals, helped increase sales. As for medical devices, a 4.4% slump in diabetes care was easily outweighed by a 1.7% increase in vascular product sales, and a nearly 11% sales gain in medical optics revenue.
On the flip side, Abbott's established pharmaceuticals (generic brands) business saw revenue sink 4.3%, while nutrition dipped 0.8%. Its nutrition segment continues to feel the effects of an August product recall from one of its suppliers, while its generic drug segment struggled in Western Europe and Japan, where sales fell 6.7%.
Looking ahead, Abbott anticipates reporting fiscal 2014 EPS of $2.16 to $2.26, roughly 10% EPS growth at the midpoint (fiscal 2013 EPS was $2.01), and expects to repurchase in excess of $2 billion worth of shares, or more than 3% of all outstanding shares, in 2014.
Shares of Abbott are down slightly more than 2% in midday trading.
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