Investors looking to find out how well Abbott Laboratories (NYSE:ABT) performed in the second quarter had reason to be confused this morning. One headline stated that “Abbott’s quarterly profit rises” while another said that the company’s “second-quarter profit falls.” Which headline was correct? Actually, both were. Let’s look at Abbott Laboratories (NYSE:ABT)’s financial results to find out how and why.
By the numbers
Abbott reported net earnings for the quarter of $476 million, or $0.30 per diluted share. That’s a 72% decline from the same quarter a year ago. However, Abbott Laboratories (NYSE:ABT) was a much different company one year ago. That was before the spinoff of AbbVie with its profit-generating Humira.
Including AbbVie’s financial performance certainly skews any yearly comparisons. Abbott’s profit increased almost 16% without AbbVie operations from last year in the numbers. Therefore, it is technically accurate to say that Abbott Laboratories (NYSE:ABT)’ increased and decreased, depending on your perspective.
Of course, those are GAAP figures. When adjusted for special items, Abbott earned $0.46 per common share. That reflects a 7% year-over-year increase with discontinued operations (i.e., AbbVie) out of the equation. It also beat Wall Street expectations of $0.44 per share and was higher than the company’s previous guidance.
Abbott Laboratories (NYSE:ABT) announced quarterly revenue of $5.45 billion, up 2.5% from the same quarter last year without the impact of AbbVie. The top-line number fell below expectations, though. Analysts estimated revenue would come in at $5.52 billion.
Beyond the numbers
Nutrition continues to be the star performer for the company. The segment generated revenue of $1.7 billion, more than any other of Abbott’s business units and up almost 8% compared to last year. That growth stems from international sales, which increased over 17% year-over-year to $990 million.
Diagnostics performed relatively well, also, with sales growth of 5.3% versus the same quarter in 2012. Abbott Laboratories (NYSE:ABT) saw slower growth in its core lab business, with a 2.6% decline in U.S. sales. However, molecular and point of care diagnostics lines of business experienced double-digit sales growth.
Abbott is still struggling somewhat with its other business segments, though. Established pharmaceuticals sales dropped 2.3% from the second quarter of 2012. Medical devices revenue was down 1.6% year-over-year.
Foreign exchange rates weighed on both segments. However, both business units also saw more success internationally, particularly in emerging markets, than they did domestically.
I tend to agree with Abbott Laboratories (NYSE:ABT) CEO Miles White’s statement that “all things considered, including headwinds from foreign exchange and a mixed global economy, this was a good quarter.” It was a pretty good quarter. And it was good enough for Abbott to maintain full-year earnings guidance of $1.98 to $2.04, reflecting double-digit growth.