Abbott Laboratories' first-quarter profit and sales beat analysts' estimates on Wednesday but some investors were disappointed as the healthcare company maintained its full-year profit forecast. The company's shares were down about 2 percent in early trading.
"It's all about the expectations," Evercore ISI analyst Vijay Kumar said, adding that some investors may have been expecting the company to raise its full-year earnings forecast. The company reiterated its FY 2018 forecast of adjusted earnings from continuing operation between $2.80 to $2.90 per share.
Abbott's first-quarter results were mainly helped by launches of new medical devices and a turnaround in its business that sells baby and adult nutritional supplements. Sales in the nutrition business, known for brands such as Similac and PediaSure, have been hemmed in since mid-2016, when China made it mandatory for manufacturers to re-register baby formulae with the government.
Quarterly sales at the unit increased 4.7 percent on an organic basis to $1.76 billion, above consensus estimates of $1.72 million, compiled by Cowen. The company reported net earnings of $418 million, or 23 cents per share, in the quarter ended March 31, compared to $419 million, or 24 cents per share, a year earlier.
Profit from Abbott's medical device business - its largest division - continued to benefit from its $25 billion purchase of St. Jude Medical, and from new device launches. Sales for the unit rose 14.6 percent to $2.74 billion in the quarter. "With the integration of Alere and St. Jude Medical well underway, debt repayment progressing, and a slew of new product launches already making a splash, Abbott continues to impress in 2018," BMO Capital Markets analyst Joanne Wuensch said.
Net sales rose to $7.39 billion from $6.34 billion. Excluding items, Abbott reported a profit of 59 cents per share. Analysts on average had expected profit of 58 cents per share on revenue of $7.29 billion, according to Thomson Reuters I/B/E/S.