Abbott Labs (ABT 43.51, +0.08, +0.2%) is a global healthcare company specializing in diagnostics, medical devices, nutritionals and branded generic pharmaceuticals. It acquired medical device company St. Jude Medical in January 2017, and the benefits of that acquisition were on display in the first quarter earnings results that were released this morning.
Briefly, Abbott achieved a 29.7% increase in worldwide sales on a reported basis and a 17.1% increase in diluted earnings per common share from continuing operations of $0.48, excluding specified items. The adjusted EPS number was above analysts' average expectation and above the company's previous guidance range of $0.42 to $0.44.
On a comparable operational basis, total sales increased 3.2%. The comparable results exclude the impact of exchange and the results for the Abbott Medical Optics and St. Jude Medical vascular closure businesses, which were divested during the first quarter, but include prior-year results for St. Jude Medical for total Abbott and the Medical Devices segment.
Worldwide Nutrition sales decreased 1.0% on an operational basis, with challenging conditions in the Chinese infant formula market leading to a 10.8% decrease in comparable operational sales for the international pediatric part of this business segment, which also includes adult nutrition sales. Conversely, U.S. pediatric nutrition sales were up 7.3%.
The Diagnostics business enjoyed a 4.7% increase in comparable operational sales, bolstered by a 4.3% increase in core Laboratory Diagnostics sales.
The Established Pharmaceuticals line achieved a 5.7% increase in sales on an operational basis as sales to key emerging markets, including Brazil, Russia, India, and China, increased 12.5%.
Finally, comparable operational sales for the Medical Devices segment jumped 4.5%, led by a 2.4% jump in sales for the core Cardiovascular and Neuromodulation products. Double-digit growth in Electrophysiology, Structural Heart, and Neuromodulation also contributed nicely to the sales growth.
Abbott Labs said that it is maintaining its fiscal 2017 guidance range, which calls for adjusted earnings per share to be between $2.40 and $2.50.
At its current price, ABT trades at roughly 17.8x estimated fiscal 2017 earnings and sports a dividend yield of 2.44%. While ABT has struggled over the last 52-week period (-0.8%), its 2017 performance thus far has been remarkably impressive as the stock is up 13.3% year-to-date.