Sales were up 10.5% excluding the positive gain from the weak dollar. All four segments -- drugs, nutrition supplements, diagnostics, and vascular -- were up at least 6.6% operationally. Vascular growth was the strongest segment, with outstanding 12.6% year-over-year growth. International sales of the company's drug-eluting stent, Xience V, drove that increase as the stent continued to perform well against older stents from Johnson & Johnson
So why the decline, yesterday? Investors' worries are probably over the same issue that they've had in the past: Its anti-inflammatory, Humira, continues to dominate the revenue line. After an increase of 36% year over year, Humira makes up 18% of total revenue. That percentage should go down slightly in coming quarters because Abbott recently closed on its acquisition of Solvay Pharmaceuticals. The first quarter only included about a month and a half of U.S. sales and only two weeks of international sales from Solvay.
Still, to satisfy investors, Abbott will need to continue to make additional purchases to expand its revenue base. Management hinted that there might be fewer purchases this year compared with last year, when it picked up Advanced Medical Optics, Evalve, and others. But Abbott does plan on continuing with tuck-in purchases to boost its drug pipeline while it pauses to make sure the bolt-on integrations elsewhere go smoothly.
As long as it doesn't overpay, as it may have when it outbid Biogen Idec
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Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Motley Fool Options recommended buying calls on Johnson & Johnson's stock. The Fool has a disclosure policy.