Abbott Laboratories(NYSE:ABT), the well-known drug and device manufacturer revealed a 3rd quarter profit that was much higher than analyst predictions even though the revenue declined. The company has been in the news for sometime as speculations are all over the place as to how it plans to spin off some of its businesses and lay off even more employees adding to the 550 they have already downsized in the nutrition, medical devices, established pharmaceuticals and molecular diagnostics divisions
A $478 million pretax restructuring charge was computed by the firm for expenses expected to be incurred in 2013 and job cuts that have taken place before. Laying off employees is not something unheard of for Abbott. An announcement was made in January that 700 from the heart stents and diagnostic testing divisions would be laid off and in early 2011; about 1,900 were eliminated as a part of restructuring.
Net income for 3 months through September 30, went up to $1.94 billion, or $1.21 per share, from $303 million, or 19 cents per share a year back. Total gain, after eliminating one-time items in the latest quarter comes to $1.30 per share, whereas revenue dropped below 1% to $9.77 billion from $9.82 billion. Analysts had calculated earnings per share of $1.28, but revenue of $9.94 billion. A 31% decline in sales and administrative expenses that saved a whopping $2.92 billion, helped to push up the profit.
The company said that it expected a 4% rise in revenue if the currency exchange rate modifications would have been consistent. Branded drugs and nutritional formula, which are the money-making sections of Abbott, went up 6.4% and 6.3% respectively. Anti-inflammatory drug Humira, Abbott’s most popular product moved up 15.7% in sales to $2.33 billion.
The drug and medical device company plans to spin off its pharmaceutical business into a separate company by the end of 2012. The new company, AbbVie, will focus solely on branded drugs, including Humira. The original company will focus on nutritional formula, generic drugs and heart stents.
Shares of ABT are down another 4.60% to after falling about 4% in the previous trading session.