Abbott Laboratories 4th-quarter profit remains flat, but Humira sales continue climb

Abbott Laboratories profit stays flat in 4Q

NEW YORK — Abbott Laboratories said Wednesday its fourth-quarter profit was flat on higher costs, but sales of the company’s diverse mix of drugs, devices and nutritional formula continued to drive revenue.

Abbott management set higher earnings guidance for 2010 based on sales from recent acquisitions, but Wall Street analysts expressed concern about the strength of the company’s U.S. pharmaceutical business.

Drug sales in the U.S. fell 8.6 percent on generic competition to the company’s seizure drug Depakote. Meanwhile, sales of the company’s best-selling drug Humira, a biotech drug for inflammatory disease, rose just 3.1 percent in the U.S. In the past Abbott has relied on Humira for roughly 35 percent of its revenue.

Company management said destocking by drug wholesalers dragged down sales in 2009.

“Clearly a lot of factors in the market affected biologics last year, and Humira, but underlying all of that I think we can do better in our own marketing progress in the U.S.,” said Chief Executive Miles White.

Leerink Swann analyst Rick Wise said in a note to investors that detailed guidance “will be important in easing any potential investor anxiety about the U.S. pharma sales outlook.”

Company shares fell 87 cents to $53.61 in midday trading.

With a diverse product mix and tight cost controls, Abbott has managed to deliver steady earnings growth despite the economic downturn that has squeezed many pharmaceutical peers.

Abbott reported earnings one day after rival Johnson & Johnson reported its first yearly decline in sales since the Depression and gave a disappointing 2010 profit forecast.

By contrast, Abbott set 2010 guidance above Wall Street expectations, predicting a profit between $4.20 and $4.25 per share. Analysts expect $4.17 per share in profit.

The North Chicago, Ill., company reported $1.54 million, or 98 cents per share, in profit during the last quarter, marking no change from a year prior. But, per-share profit from continuing operations and excluding charges rose to $1.18 from $1.06. Revenue rose 10.6 percent to $8.79 billion from $7.95 billion.

Analysts polled by Thomson Reuters expected profit of $1.17 per share on $8.60 billion in revenue.

For the full year, the company earned $5.75 billion, or $3.69 per share, up from profit of $4.88 billion, or $3.03 per share, in 2008. Revenue rose to $30.77 billion from $29.53 billion.

Operating costs, fueled by higher acquisition-related expenses, jumped 11.6 percent to $6.93 billion.

Worldwide pharmaceutical sales for the quarter rose 5.2 percent to $4.85 billion, with sales of the drug Humira rising 23 percent to $1.66 billion.

Meanwhile, nutritional product sales rose 8.8 percent to $1.43 billion while diagnostic product sales rose 8.8 percent to $975 million. Vascular product sales rose 9.1 percent to $723 million on sales of the company’s drug-coated Xience stents, which are mesh-wire tubes used to hold arteries open after they are surgically cleared of plaque.

Abbott also recorded $810 million in sales of “other” products, which include products gained from the buyout of Advanced Medical Optics.

The company has snatched up a slew of small-to-midsize companies in the past year, including a $6.6 billion deal for Belgian-based Solvay’s pharmaceutical business that is expected to contribute $3 billion in sales for 2010.

White told analysts during a conference call that the company’s acquisition strategy and research and development would help replace revenue from Humira, which will lose U.S. patent protection in 2017.

“I don’t think you can count on a single bullet that is going to somehow miraculously replace a product like Humira,” White said. “I think we have to prepare for a number of other growth drivers across the board that would replace the growth being driven by Humira, and we are.”

(This version CORRECTS the attribution of the first quote to CEO White.)