(Reuters) - Abbott Laboratories’ just beat expectations for first quarter profits and revenue on Wednesday but stuck to a full-year profit forecast some investors had expected would be raised, sending the healthcare company’s shares lower.
Some analysts also said a 6.9 percent rise in organic sales, which excludes the impact of foreign currency and certain divestitures and acquisitions, was just shy of a roughly 7 percent expected by investors.
Thomson Reuters I/B/E/S had no consensus estimate for the organic sales.
Leerink analyst Danielle Antalffy said the miss “may limit upside to the shares today despite an otherwise very good quarter.” Several other analysts said the company had failed to meet heightened expectations among investors.
Abbott shares fell 2.7 percent to trade at $58.22 mid-morning in New York.
On a reported basis, Abbott’s sales rose 16.7 percent to $7.39 billion, beating consensus expectations of $7.29 billion, according to Thomson Reuters I/B/E/S.
Excluding items, Abbott reported a profit of 59 cents per share against expectations of 58 cents per share.
The company reiterated its full-year 2018 forecast of adjusted earnings from continuing operation between $2.80 to $2.90 per share.
“It’s all about the expectations,” Evercore ISI analyst Vijay Kumar said, saying that investors may have been disappointed that the healthcare company only maintained its full-year profit forecast.
The company’s first-quarter results were helped by launches of new medical devices and a turnaround in its business that sells baby and adult nutritional supplements. Sales across all the company’s business units, except in its established pharmaceuticals business, beat expectations.
The established pharmaceuticals, which sells generic drugs in emerging growth countries such as India, raked in sales of 1.04 billion, but missed analysts’ consensus estimates of $1.08 billion.
The weak sales were due to a slowing market growth rate in Russia, Chief Executive Miles White said on a conference call.
“We seem to have a given market that affects our established pharmaceuticals or even our nutrition business from time to time somewhere. And in this particular case, it’s Russia,” White said.
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.
Reporting by Manas Mishra and Tamara Mathias in Bengaluru; Editing by Shailesh Kuber and Patrick Graham