REUTERS - Abbott Laboratories’ quarterly results beat estimates and the company raised the top end of its full-year earnings forecast range on Wednesday, as a string of recent deals and medical device approvals help spur growth in its largest unit.
The company has acquired several rivals this year, including St. Jude Medical and Alere, to bolster its medical devices business, and favorable tax laws in India are boosting its generics business.
The company’s shares rose 2.8 percent to $56.60 to a record in morning trading.
Strength in medical devices pulled this quarter, while recent product approvals puts Abbott in a good position, Jefferies analyst Raj Denhoy told Reuters.
Sales in the medical devices business rose 6.5 percent to $2.60 billion, accounting for more than a third of total sales.
The generics unit, which sells drugs in emerging markets, brought in sales of $1.17 billion, up 16 percent.
Sales in India, a key market for the company, were helped as the implementation of the new Goods and Services Tax prompted inventory restocking.
Abbott said it now expects full-year adjusted 2017 profit from continuing operations of $2.48-$2.50 per share, compared with its previous range of $2.43-$2.53.
Chief Financial Officer Brian Yoor said he expects the recently closed Alere deal to contribute around $475 million to reported sales this year.
Sales in Abbott’s nutrition unit, which had been under pressure due to challenges in China, rose marginally. “We’ve seen a stabilizing of China; it hasn’t been as choppy as it was in the last 2 years,” Chief Executive Miles White said.
Abbott and other makers of infant formula have struggled to boost sales in China after the country made it mandatory last year for manufacturers to re-register baby formulas with the government.
During the quarter, the U.S. Food and Drug Administration approved several of Abbott’s devices, including the FreeStyle Libre glucose monitoring system and heart devices HeartMate 3 and Ellipse.
“Overall, we’d expect investors to view these results positively - not just for ABT, but again for the broader med-tech group,” Leerink analyst Danielle Antalffy said.
Net sales of $6.83 billion beat the average analyst estimate of $6.72 billion, according to Thomson Reuters I/B/E/S. Excluding items, profit was 66 cents per share, beating estimates by a penny.
Reporting by Manas Mishra and Akankshita Mukhopadhyay in Bengaluru; Editing by Martina D'Couto and Saumyadeb Chakrabarty