Abbott Laboratories reports $1.2 billion 4Q profit on strong drug sales, international results

Pharmaceutical and medical products maker Abbott Laboratories Inc. reported a $1.2 billion fourth-quarter profit Wednesday on the strength of strong drug sales worldwide, capping a year which saw international sales account for a majority of its business for the first time.

Blockbuster anti-inflammatory drug Humira led the way with a 43 percent jump in sales from a year earlier to top $3 billion in sales for 2007. Other Abbott drugs Depakote, TriCor and Kaletra also posted double-digit sales gains as pharmaceuticals helped it increase companywide sales by 16 percent.

Abbott's first-quarter outlook for earnings was slightly below analysts' expectations, but the strong fourth-quarter results still sent shares up 48 cents to $57.97 Wednesday. Earlier in the day, the stock had fallen as low as $54.67.

Both the company and analysts painted an optimistic view of longer-term prospects for the North Chicago, Ill.-based company, however.

"Humira represents the primary growth and profitability driver for the company, and fourth-quarter performance continues to support our bullish view of the product," Cowen and Co. analyst Sara Michelmore said in a note to investors.

The fourth-quarter gain represented a turnaround from a loss a year earlier, when results were reduced by hefty acquisition charges for Kos Pharmaceuticals Inc. For the quarter ended Dec. 31, the company's net income amounted to 77 cents per share and compared with a loss of $476.2 million, or 31 cents per share, in the same period of 2006.

Revenue rose to $7.22 billion from $6.22 billion, exceeding the $6.97 billion estimated by analysts polled by Thomson Financial. Favorable exchange rates contributed 4.5 percent to the increase.

Adjusted earnings, excluding certain items, rose to 93 cents per share from 75 cents per share in the year-earlier period. That was a penny better than analysts' consensus estimate.

The 2006 fourth quarter included a $1.3 billion, or 85 cents-per-share, charge related to costs in the $3.7 billion acquisition of Kos Pharmaceuticals last year.

"Going forward, we're targeting higher growth markets, including emerging markets where we can distinguish Abbott from the competition with leading technology and innovative new products that meet the needs of patients and customers," CEO Miles White said on a conference call. "In 2007, we saw that focus pay off as our unique mix of businesses and new products delivered strong results."

Abbott's U.S. pharmaceutical sales increased 16.6 percent in the quarter and its international pharmaceutical sales rose 21.3 percent.

Humira, Abbott's top-selling product, recorded $527 million in sales in the most recent quarter. The company forecast 2008 Humira sales of about $4 billion.

Medical product sales climbed 11.5 percent, led by 15.2 percent growth in worldwide Diabetes Care sales and a 16.4 percent gain in international diagnostics sales. Nutritional product sales were up 11.2 percent over a year earlier, helped by strong results in emerging growth markets.

Abbott projected earnings per share of $3.20 to $3.25 for 2008 and 61 cents to 63 cents for the first quarter, both excluding items. Analysts had estimated earnings at 65 cents per share for the first quarter and $3.22 per share for the year.

Given the leadership positions of our major businesses, and the new products launching over the next year, we expect another year of strong results in 2008," Chairman and CEO Miles White said in a statement.

For the full year, Abbott earned $3.6 billion, or $2.31 a share, compared with $1.72 billion, or $1.12 a share, in 2006. Revenue increased 15 percent to $25.9 billion from $22.5 billion.

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