Chicago has the Cubs to cheer about, which is good, because cheering about Abbott Laboratories
Sales rose 11.6% to $4.8 billion (8% without the benefit of a weak dollar), while, excluding one-time charges, earnings per share increased 10% year over year to $0.53, meeting guidance.
Including one-time charges in both 2002 and 2003 ("one-time charges" is clearly a misnomer), Generally Accepted Accounting Principles (GAAP) earnings per share rose 4.3% to $0.48.
Domestic pharmaceutical sales were the equivalent of a home run, jumping 20% to $1.29 billion, but diagnostic products continued to whiff, with sales up only 3% worldwide and down 13% in the U.S.
In pharmaceuticals, some Abbott drugs came under pressure from competitors, including prostrate cancer drug Lupron, and ulcer drug Prevacid, against which AstraZeneca
On the positive side, Abbott's new arthritis drug (Humira) earned $78 million in quarterly sales, a strong start, and existing drugs like Flomax registered impressive advances, growing sales 30%.
Looking ahead, the company stuck to earlier guidance of $0.64 to $0.66 in fourth-quarter earnings per share, and should top $19 billion in 2003 sales and have earnings per share (excluding charges) of $2.21. In 2004, Abbott will spin off a hospital products company with about $2.5 billion in annual sales.
As for valuation, this long-respectable company continues to grow, and at $42, trades at 19 times this year's earnings estimate and yields 2.3% -- a below-market average P/E multiple and above average yield.