DESPITE SHORT-TERM COSTS, GUIDANT ACQUISITION SEEN AS BOON TO ABBOTT
Analysts are projecting a sunny outlook for Abbott Laboratories based on 2006 second-quarter results -- despite some company challenges. At first glance, the company may seem to be faring worse than it actually is, said stock market website www.SeekingAlpha.com (http://www.SeekingAlpha.com) Editor Jonathan Liss.
The firm reported a 30 percent decline in second-quarter profits, mainly because of costs associated with its acquisition of Guidant's vascular unit and the discontinuation of sales of three medications made by German drugmaker Boehringer-Ingelheim, said Liss.
"The firm's net income fell to $612.2 million, or 40 cents a share, from $877.1 million, or 56 cents a share," he added.
But the company's medical-product unit posted an 18 percent gain in sales, also partly because of the Guidant acquisition, Liss said. The company reported earnings of "$946.7 million, or 62 cents per share, well above its own guidance of 56 cents to 58 cents," Liss noted, citing a Chicago Tribune report.
"The recently acquired Guidant Vascular business appears to be making a mark already, with total Vascular Unit sales of $259 million, about $64 million above our projection," said RBC Capital Markets analyst Phil Nalbone.
Abbott's existing business is "at least stable," and the Guidant acquisition "adds an important source of long-term growth and potential for profit expansion," said Nalbone. (http://www.fdanews.com/ddl/33_29/)