Abbott Laboratories Gets Dose of Market Success on Healthy Earnings, Diagnoses Strong Guidance

Abbott Laboratories ABT is riding high on Wednesday after posting successful first quarter earnings and issuing healthy guidance. The Abbott Park, Illinois-based firm's EPS rose five percent year-over-year to $0.42, edging expectations of $0.41. First quarter revenue rose 1.8 percent to $5.38 billion, falling just short of the $5.42 billion Wall Street consensus. Eating Right Revenue in Abbott's nutrition segment jumped nearly nine percent to $1.7 billion, led by a 14.2 percent surge in international sales. The company attributed its success abroad to growth in emerging markets, which accounted for approximately 45 percent of its total nutrition sales. Within this segment, pediatric nutrition sales were the key success driver, soaring over 21 percent internationally and 13 percent overall. Faulty Devices The global healthcare product maker's medical device segment dropped 4.6 percent during the quarter due to a 12.7 percent decline in US sales. All categories in this segment declined, with the sharpest fall occurring in vascular sales at nearly eight percent. According to Abbott, US vascular sales were impacted by pricing pressure and a decline in procedures due to market conditions. And, the company mentioned the decline of certain royalty revenues as another factor in this segment's poor performance. Meanwhile, international sales growth of one percent wasn't enough to keep this segment above water. Dividend Ordered On February 15, Abbott declared a quarterly dividend of $0.14 per share. Shareholders of record at the close of business on April 15 will be paid on May 15. Total Recall On April 15, Abbott announced a voluntary recall of its FreeStyle InsuLinx® blood glucose meters in the United States. The problem involves inaccurate readings of extremely high blood sugar levels that could lead to delayed or improper medical treatment, resulting in serious injury or death. There has been just one reported patient incident that may be related to the malfunction. The announcement caused a 2.7 percent decline in Abbott's stock price, its second largest single-day drop thus far in 2013. Guidance Just as Analysts Prescribed Abbott has issued second quarter guidance of $0.43 to $0.45 per share, hitting the $0.44 Wall Street consensus right on the head. And, its fiscal 2013 guidance of $1.98 to $2.04 per share places it on course to reach the $2.01 analysts expect. Dose of Market Success Abbott has held steady in the mid-to-high $30s since late March and continues to do so. The stock rests a bit over $37 as of this writing. Abbott is up about 2.5 percent on Wednesday.