ABBOTT PARK, Ill., Oct. 19, 2016
/PRNewswire/ -- Abbott (NYSE: ABT) today announced financial
results for the third quarter ended Sept.
30, 2016.
- Third-quarter worldwide sales of $5.3
billion increased 2.9 percent on a reported basis and 4.0
percent on an operational basis.
- Reported diluted EPS from continuing operations under GAAP was
a $(0.24) loss in the third quarter,
primarily due to an adjustment of $(0.66) per share associated with Abbott's equity
investment in Mylan to reflect Mylan's share price as of
Sept. 30, 2016. Excluding specified
items, adjusted diluted EPS from continuing operations was
$0.59 in the third quarter, at the
high end of the previous guidance range.
- Abbott adjusted its full-year 2016 EPS guidance for continuing
operations under GAAP to $0.59 to
$0.61, and narrowed and raised at the mid-point its
full-year 2016 adjusted EPS for continuing operations to
$2.19 to $2.21, exceeding its initial
guidance for the year.
- In the third quarter, Abbott received U.S. FDA approval for its
FreeStyle® Libre Pro
system, a revolutionary continuous glucose monitoring system for
healthcare professionals to use with their patients with diabetes;
submitted for U.S. regulatory approval a consumer version of
FreeStyle Libre, to be used by people with diabetes to self-monitor
glucose levels; received U.S. FDA approval for AbsorbTM,
the only fully dissolving heart stent; and received U.S. FDA
approval for TECNIS® Symfony intraocular lenses for the
treatment of cataracts, the first and only extended depth of focus
lenses for people with cataracts.
- On Sept. 16, 2016, Abbott
announced the sale of Abbott Medical Optics, its vision care
business, to Johnson & Johnson for $4.325 billion. This transaction aligns with
Abbott's shaping of its portfolio, which has recently focused on
developing leadership positions in cardiovascular devices and
expanding diagnostics. The transaction is expected to close in the
first quarter of 2017 and is subject to customary closing
conditions, including regulatory approvals.
"Strong performance in Established Pharmaceuticals and Medical
Devices led our sales growth this quarter," said Miles D. White, chairman and chief executive
officer, Abbott. "We're on track to deliver the financial
commitments we set at the beginning of the year. We also had
several key product launches and continued to take strategic
actions to shape our business for long-term growth."
THIRD-QUARTER BUSINESS OVERVIEW
Following are sales by business segment and commentary for
the third quarter and the first nine months of the year:
Total Company
($ in millions)
|
|
|
|
|
|
|
% Change vs.
3Q15
|
|
Sales
3Q16
|
|
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Reported
|
|
Operational
|
|
Reported
|
|
Operational
|
Total
*
|
1,645
|
|
3,657
|
|
5,302
|
|
4.5
|
|
2.2
|
|
3.7
|
|
2.9
|
|
4.0
|
Nutrition
|
755
|
|
1,000
|
|
1,755
|
|
3.5
|
|
(5.7)
|
|
(4.1)
|
|
(2.0)
|
|
(1.0)
|
Diagnostics
|
362
|
|
851
|
|
1,213
|
|
4.1
|
|
5.3
|
|
6.0
|
|
5.0
|
|
5.4
|
Established
Pharmaceuticals
|
--
|
|
1,012
|
|
1,012
|
|
n/a
|
|
5.3
|
|
9.0
|
|
5.3
|
|
9.0
|
Medical
Devices
|
519
|
|
791
|
|
1,310
|
|
6.0
|
|
6.7
|
|
6.1
|
|
6.4
|
|
6.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Total Abbott Sales
from continuing operations include Other Sales of $12
million.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Change vs.
9M15
|
|
Sales
9M16
|
|
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Reported
|
|
Operational
|
|
Reported
|
|
Operational
|
Total
*
|
4,831
|
|
10,689
|
|
15,520
|
|
3.5
|
|
1.3
|
|
5.9
|
|
2.0
|
|
5.2
|
Nutrition
|
2,224
|
|
2,942
|
|
5,166
|
|
3.8
|
|
(3.0)
|
|
1.6
|
|
(0.2)
|
|
2.5
|
Diagnostics
|
1,062
|
|
2,495
|
|
3,557
|
|
3.6
|
|
3.9
|
|
7.1
|
|
3.8
|
|
6.1
|
Established
Pharmaceuticals
|
--
|
|
2,880
|
|
2,880
|
|
n/a
|
|
1.6
|
|
9.8
|
|
1.6
|
|
9.8
|
Medical
Devices
|
1,520
|
|
2,359
|
|
3,879
|
|
2.8
|
|
4.1
|
|
5.6
|
|
3.6
|
|
4.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Total Abbott Sales
from continuing operations include Other Sales of $38
million.
|
n/a = Not
Applicable.
|
Note: Operational
growth reflects percentage change over the prior year excluding the
impact of exchange rates. In order to compute results excluding the
impact of exchange rates, current year U.S. dollar sales are
multiplied or divided, as appropriate, by the current year average
foreign exchange rates and then those amounts are multiplied or
divided, as appropriate, by the prior year average foreign exchange
rates.
|
Third-quarter 2016 worldwide sales of $5.3 billion increased 2.9 percent on a reported
basis, including an unfavorable 1.1 percent effect of foreign
exchange, and increased 4.0 percent on an operational basis.
Excluding the impact of Venezuelan operations, sales would have
increased 4.5 percent on a reported basis and 5.6 percent on an
operational basis.
International sales increased 2.2 percent on a reported basis
and 3.7 percent on an operational basis in the third quarter.
International operational growth was led by strong performance
across Established Pharmaceuticals, Diagnostics and Medical
Devices.
Nutrition
($ in
millions)
|
|
|
|
|
|
|
% Change vs.
3Q15
|
|
Sales
3Q16
|
|
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Reported
|
|
Operational
|
|
Reported
|
|
Operational
|
Total
|
755
|
|
1,000
|
|
1,755
|
|
3.5
|
|
(5.7)
|
|
(4.1)
|
|
(2.0)
|
|
(1.0)
|
Pediatric
|
414
|
|
553
|
|
967
|
|
4.3
|
|
(9.4)
|
|
(7.5)
|
|
(4.0)
|
|
(2.8)
|
Adult
|
341
|
|
447
|
|
788
|
|
2.6
|
|
(0.8)
|
|
0.6
|
|
0.6
|
|
1.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Change vs.
9M15
|
|
Sales
9M16
|
|
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Reported
|
|
Operational
|
|
Reported
|
|
Operational
|
Total
|
2,224
|
|
2,942
|
|
5,166
|
|
3.8
|
|
(3.0)
|
|
1.6
|
|
(0.2)
|
|
2.5
|
Pediatric
|
1,242
|
|
1,664
|
|
2,906
|
|
5.0
|
|
(5.1)
|
|
(0.7)
|
|
(1.0)
|
|
1.6
|
Adult
|
982
|
|
1,278
|
|
2,260
|
|
2.3
|
|
(0.1)
|
|
4.7
|
|
0.9
|
|
3.7
|
Worldwide Nutrition sales decreased 2.0 percent on a reported
basis in the third quarter, including an unfavorable 1.0 percent
effect of foreign exchange, and decreased 1.0 percent on an
operational basis.
Worldwide Pediatric Nutrition sales decreased 4.0 percent on a
reported basis in the third quarter, including an unfavorable 1.2
percent effect of foreign exchange, and decreased 2.8 percent on an
operational basis. During the quarter, Abbott introduced
Similac® Pro-Advance™ and Similac Pro-Sensitive™, the
first infant formulas in the U.S. with a human milk oligosaccharide
that offers a unique immune-nourishing prebiotic. International
sales declined 9.4 percent on a reported basis and 7.5 percent on
an operational basis, driven by challenging market conditions in
China, partially offset by
continued strong performance in Latin
America and Southeast
Asia.
Worldwide Adult Nutrition sales increased 0.6 percent on a
reported basis in the third quarter, including an unfavorable 0.8
percent effect of foreign exchange, and increased 1.4 percent on an
operational basis. Operational sales growth in the quarter was led
by growth of Ensure®, Abbott's complete and balanced
nutrition brand.
Diagnostics
($ in millions)
|
|
|
|
|
|
|
% Change vs.
3Q15
|
|
Sales
3Q16
|
|
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Reported
|
|
Operational
|
|
Reported
|
|
Operational
|
Total
|
362
|
|
851
|
|
1,213
|
|
4.1
|
|
5.3
|
|
6.0
|
|
5.0
|
|
5.4
|
Core
Laboratory
|
220
|
|
757
|
|
977
|
|
7.6
|
|
5.0
|
|
5.7
|
|
5.6
|
|
6.1
|
Molecular
|
42
|
|
70
|
|
112
|
|
(9.6)
|
|
5.4
|
|
6.3
|
|
(0.8)
|
|
(0.3)
|
Point of
Care
|
100
|
|
24
|
|
124
|
|
3.4
|
|
15.6
|
|
14.1
|
|
5.6
|
|
5.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Change vs.
9M15
|
|
Sales
9M16
|
|
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Reported
|
|
Operational
|
|
Reported
|
|
Operational
|
Total
|
1,062
|
|
2,495
|
|
3,557
|
|
3.6
|
|
3.9
|
|
7.1
|
|
3.8
|
|
6.1
|
Core
Laboratory
|
616
|
|
2,224
|
|
2,840
|
|
3.4
|
|
3.8
|
|
7.1
|
|
3.7
|
|
6.3
|
Molecular
|
140
|
|
199
|
|
339
|
|
(3.4)
|
|
1.9
|
|
5.2
|
|
(0.3)
|
|
1.5
|
Point of
Care
|
306
|
|
72
|
|
378
|
|
7.6
|
|
13.3
|
|
13.6
|
|
8.6
|
|
8.7
|
Worldwide Diagnostics sales increased 5.0 percent on a reported
basis in the third quarter, including an unfavorable 0.4 percent
effect of foreign exchange, and increased 5.4 percent on an
operational basis. During the quarter, Abbott unveiled its new
suite of diagnostic instruments, AlinityTM, at the
American Association for Clinical Chemistry conference. The Alinity
suite includes new instruments for every area of the diagnostics
market where Abbott competes and incorporates features deemed
important to customers, including increased automation, higher
volumes, faster results, smaller size and an improved user
interface.
Core Laboratory Diagnostics sales increased 5.6 percent on a
reported basis in the third quarter, including an unfavorable 0.5
percent effect of foreign exchange, and increased 6.1 percent on an
operational basis. Operational sales growth in the quarter was led
by continued share gains in the U.S. and internationally.
Molecular Diagnostics sales decreased 0.8 percent on a reported
basis in the third quarter, including an unfavorable 0.5 percent
effect of foreign exchange, and decreased 0.3 percent on an
operational basis. As expected, continued strong growth in Abbott's
infectious disease testing business was offset primarily by the
planned scale down of its genetics business.
Point of Care Diagnostics sales increased 5.6 percent on a
reported basis in the third quarter, including a favorable 0.3
percent effect of foreign exchange, and increased 5.3 percent on an
operational basis. Sales growth was led by continued adoption of
Abbott's i-STAT® handheld system in the U.S. and
international markets.
Established Pharmaceuticals
($ in millions)
|
|
|
|
|
|
|
% Change vs.
3Q15
|
|
Sales
3Q16
|
|
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Reported
|
|
Operational
|
|
Reported
|
|
Operational
|
Total
|
--
|
|
1,012
|
|
1,012
|
|
n/a
|
|
5.3
|
|
9.0
|
|
5.3
|
|
9.0
|
Key Emerging
Markets
|
--
|
|
747
|
|
747
|
|
n/a
|
|
7.0
|
|
12.2
|
|
7.0
|
|
12.2
|
Other
|
--
|
|
265
|
|
265
|
|
n/a
|
|
0.7
|
|
0.6
|
|
0.7
|
|
0.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Change vs.
9M15
|
|
Sales
9M16
|
|
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Reported
|
|
Operational
|
|
Reported
|
|
Operational
|
Total
|
--
|
|
2,880
|
|
2,880
|
|
n/a
|
|
1.6
|
|
9.8
|
|
1.6
|
|
9.8
|
Key Emerging
Markets
|
--
|
|
2,135
|
|
2,135
|
|
n/a
|
|
2.7
|
|
13.4
|
|
2.7
|
|
13.4
|
Other
|
--
|
|
745
|
|
745
|
|
n/a
|
|
(1.5)
|
|
--
|
|
(1.5)
|
|
--
|
Established Pharmaceuticals sales increased 5.3 percent on a
reported basis in the third quarter, including an unfavorable 3.7
percent effect of foreign exchange, and increased 9.0 percent on an
operational basis.
Key Emerging Markets include India, Russia, Brazil and China, along with several additional emerging
markets that represent the most attractive long-term growth
opportunities for Abbott's branded generics product portfolio.
Sales in these key geographies increased 7.0 percent on a reported
basis and 12.2 percent on an operational basis. Operational sales
growth was led by continued strong growth in India, which comprises more than 20 percent of
Abbott's Established Pharmaceuticals sales, as well as above-market
growth in several countries throughout Latin America driven by commercial initiatives
and locally relevant portfolio expansion.
Medical Devices
($ in millions)
|
|
|
|
|
|
|
% Change vs.
3Q15
|
|
Sales
3Q16
|
|
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Reported
|
|
Operational
|
|
Reported
|
|
Operational
|
Total
|
519
|
|
791
|
|
1,310
|
|
6.0
|
|
6.7
|
|
6.1
|
|
6.4
|
|
6.0
|
Vascular
|
305
|
|
403
|
|
708
|
|
9.8
|
|
2.0
|
|
1.4
|
|
5.2
|
|
4.9
|
Diabetes
Care
|
96
|
|
210
|
|
306
|
|
(2.2)
|
|
19.1
|
|
20.7
|
|
11.5
|
|
12.5
|
Medical
Optics
|
118
|
|
178
|
|
296
|
|
3.7
|
|
4.8
|
|
1.7
|
|
4.4
|
|
2.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vascular Product
Lines:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Coronary
Devicesa)
|
201
|
|
336
|
|
537
|
|
4.8
|
|
--
|
|
(0.8)
|
|
1.8
|
|
1.2
|
Endovascularb)
|
76
|
|
66
|
|
142
|
|
4.6
|
|
13.7
|
|
14.3
|
|
8.6
|
|
8.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a)
Includes DES / BVS product portfolio, structural heart, guidewires,
balloon catheters and other coronary products.
|
b)
Includes vessel closure, carotid stents and other peripheral
products.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Change vs.
9M15
|
|
|
Sales
9M16
|
|
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Reported
|
|
Operational
|
|
Reported
|
|
Operational
|
Total
|
1,520
|
|
2,359
|
|
3,879
|
|
2.8
|
|
4.1
|
|
5.6
|
|
3.6
|
|
4.5
|
Vascular
|
940
|
|
1,235
|
|
2,175
|
|
9.5
|
|
0.1
|
|
1.8
|
|
3.9
|
|
4.9
|
Diabetes
Care
|
238
|
|
594
|
|
832
|
|
(18.6)
|
|
12.6
|
|
15.7
|
|
1.5
|
|
3.5
|
Medical
Optics
|
342
|
|
530
|
|
872
|
|
4.2
|
|
4.9
|
|
4.6
|
|
4.6
|
|
4.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vascular Product
Lines:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Coronary
Devicesa)
|
597
|
|
1,039
|
|
1,636
|
|
4.5
|
|
(1.5)
|
|
--
|
|
0.6
|
|
1.6
|
Endovascularb)
|
226
|
|
194
|
|
420
|
|
7.5
|
|
9.0
|
|
11.7
|
|
8.2
|
|
9.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a)
Includes DES / BVS product portfolio, structural heart, guidewires,
balloon catheters and other coronary products.
|
b)
Includes vessel closure, carotid stents and other peripheral
products.
|
|
|
|
|
|
|
Worldwide Medical Devices sales increased 6.4 percent on a
reported basis in the third quarter, including a favorable 0.4
percent effect of foreign exchange, and increased 6.0 percent on an
operational basis.
Worldwide sales of Vascular products increased 5.2 percent on a
reported basis in the third quarter, including a favorable 0.3
percent effect of foreign exchange, and increased 4.9 percent on an
operational basis. Sales growth in Vascular products was led by
double-digit growth of MitraClip®, Abbott's device for
the treatment of mitral regurgitation, as Abbott continues to build
the market for this first-in-class device. Strong sales growth in
Abbott's Endovascular business was driven by vessel closure
products and Supera®, Abbott's unique stent for the
treatment of blockages in the leg. In the quarter, Abbott received
U.S. FDA approval for Absorb, the only fully dissolving heart
stent.
Worldwide Diabetes Care sales increased 11.5 percent on a
reported basis in the third quarter, including an unfavorable 1.0
percent effect of foreign exchange, and increased 12.5 percent on
an operational basis. International sales growth was driven by
continued consumer uptake of FreeStyle Libre, Abbott's
revolutionary continuous glucose monitoring system that eliminates
the need for finger-sticks. In September, Abbott received U.S. FDA
approval for the FreeStyle Libre Pro system, which is designed to
help healthcare professionals make better, customized treatment
decisions for their patients – and at a significantly lower cost
than other professional continuous glucose monitoring systems.
During the quarter, Abbott submitted the consumer version of the
FreeStyle Libre system for review by the U.S. FDA. The consumer
version of the FreeStyle Libre system is designed to eliminate the
need for routine finger-sticks and provides glucose data in a
simple format that allows people with diabetes to better
self-monitor their glucose levels.
Worldwide Medical Optics sales increased 4.4 percent on a
reported basis in the third quarter, including a favorable 1.9
percent effect of foreign exchange, and increased 2.5 percent on an
operational basis. Operational sales growth was driven by continued
market uptake of cataract products in the premium intraocular lens
segment. In the quarter, Abbott received U.S. FDA approval and
launched its TECNIS Symfony intraocular lenses, the first and only
lenses in the U.S. that provide a full range of continuous
high-quality vision following cataract surgery.
ABBOTT NARROWS ITS FULL-YEAR EARNINGS-PER-SHARE
GUIDANCE
Abbott is adjusting its projected earnings per share from
continuing operations under Generally Accepted Accounting
Principles (GAAP) to $0.59 to $0.61
for the full year 2016.
Abbott forecasts net specified items for the full year 2016 of
approximately $1.60 per share.
Specified items include intangible amortization expense, the impact
of the Venezuelan currency devaluation in the first quarter and an
adjustment to the equity investment in Mylan in the third quarter,
expenses associated with acquisitions, including bridge facility
fees, charges related to cost reduction initiatives and other
expenses and the recognition of deferred taxes associated with the
pending sale of the Abbott Medical Optics business (AMO), partially
offset by the favorable resolution of various tax positions from
prior years.
Excluding specified items, Abbott is raising the mid-point and
narrowing its full-year 2016 guidance range for earnings per share
from continuing operations to $2.19 to
$2.21, exceeding its initial guidance for the year.
ABBOTT DECLARES 371ST QUARTERLY DIVIDEND
On Sept. 15, 2016, the board of
directors of Abbott declared the company's quarterly dividend
of $0.26 per share. Abbott's cash dividend is payable
Nov. 15, 2016, to shareholders of
record at the close of business on Oct. 14,
2016.
Abbott is a member of the S&P 500 Dividend Aristocrats
Index, which tracks companies that have annually increased their
dividend for 25 consecutive years.
About Abbott:
Abbott is a global healthcare company devoted to improving life
through the development of products and technologies that span the
breadth of healthcare. With a portfolio of leading, science-based
offerings in diagnostics, medical devices, nutritionals and branded
generic pharmaceuticals, Abbott serves people in more than 150
countries and employs approximately 74,000 people.
Visit Abbott at www.abbott.com and connect with us on Twitter at
@AbbottNews.
Abbott will webcast its live third-quarter earnings conference
call through its Investor Relations website at
www.abbottinvestor.com at 8 a.m. Central
time today. An archived edition of the call will be
available after 11 a.m. Central
time.
— Private Securities Litigation Reform
Act of 1995 —
A Caution Concerning Forward-Looking
Statements
Some statements in this news release may be forward-looking
statements for purposes of the Private Securities Litigation Reform
Act of 1995. Abbott cautions that these forward-looking statements
are subject to risks and uncertainties that may cause actual
results to differ materially from those indicated in the
forward-looking statements. Economic, competitive, governmental,
technological and other factors that may affect Abbott's operations
are discussed in Item 1A, "Risk Factors,'' to our Annual Report on
Securities and Exchange Commission Form 10-K for the year ended
Dec. 31, 2015, and our Quarterly
Report on Form 10-Q for the period ended June 30, 2016,
and are incorporated by reference. Abbott undertakes no obligation
to release publicly any revisions to forward-looking statements as
a result of subsequent events or developments, except as required
by law.
Abbott Laboratories
and Subsidiaries
|
Condensed
Consolidated Statement of Earnings
|
Third Quarter Ended
September 30, 2016 and 2015
|
(in millions, except
per share data)
|
(unaudited)
|
|
|
|
|
|
|
|
|
3Q16
|
|
3Q15
|
|
%
Change
|
|
Net Sales
|
$5,302
|
|
$5,150
|
|
2.9
|
|
|
|
|
|
|
|
|
Cost of products
sold, excluding amortization expense
|
2,285
|
|
2,242
|
|
1.9
|
|
Amortization of
intangible assets
|
140
|
|
151
|
|
(7.6)
|
|
Research and
development
|
352
|
|
378
|
|
(6.7)
|
|
Selling, general, and
administrative
|
1,628
|
|
1,666
|
|
(2.3)
|
|
Total Operating Cost
and Expenses
|
4,405
|
|
4,437
|
|
(0.7)
|
|
|
|
|
|
|
|
|
Operating
earnings
|
897
|
|
713
|
|
25.8
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
95
|
|
16
|
|
n/m
|
1)
|
Net foreign exchange
(gain) loss
|
9
|
|
(14)
|
|
n/m
|
|
Other (income)
expense, net
|
972
|
|
(3)
|
|
n/m
|
2)
|
Earnings (Loss) from
Continuing Operations before taxes
|
(179)
|
|
714
|
|
n/m
|
|
|
|
|
|
|
|
|
Taxes on Earnings
(Loss) from Continuing Operations
|
178
|
|
118
|
|
50.4
|
3)
|
Earnings (Loss) from
Continuing Operations
|
(357)
|
|
596
|
|
n/m
|
|
|
|
|
|
|
|
|
Earnings (Loss) from
Discontinued Operations, net of taxes
|
28
|
|
(32)
|
|
n/m
|
|
Gain on Sale of
Discontinued Operations, net of taxes
|
--
|
|
16
|
|
n/m
|
|
Net Earnings (Loss)
from Discontinued Operations, net of taxes
|
28
|
|
(16)
|
|
n/m
|
|
|
|
|
|
|
|
|
Net Earnings
(Loss)
|
$(329)
|
|
$580
|
|
n/m
|
|
|
|
|
|
|
|
|
Net Earnings from
Continuing Operations, excluding
|
|
|
|
|
|
|
Specified Items, as
described below
|
$883
|
|
$821
|
|
7.6
|
4)
|
|
|
|
|
|
|
|
Diluted Earnings
(Loss) per Common Share from:
|
|
|
|
|
|
|
Continuing
Operations
|
$(0.24)
|
|
$0.39
|
|
n/m
|
|
Discontinued
Operations
|
0.02
|
|
(0.01)
|
|
n/m
|
|
Total
|
$(0.22)
|
|
$0.38
|
|
n/m
|
|
|
|
|
|
|
|
|
Diluted Earnings per
Common Share from Continuing
|
|
|
|
|
|
|
Operations, excluding
Specified Items, as described below
|
$0.59
|
|
$0.54
|
|
9.3
|
4)
|
|
|
|
|
|
|
|
Average Number of
Common Shares Outstanding
|
|
|
|
|
|
|
Plus Dilutive Common
Stock Options
|
1,476
|
|
1,505
|
|
|
5)
|
NOTES:
|
|
See tables on page 14
for an explanation of certain non-GAAP financial
information.
|
n/m = Percent change
is not meaningful.
|
See footnotes on the
following page.
|
|
|
1)
|
2016 Interest
expense, net includes amortization expense associated with bridge
facility fees.
|
|
|
2)
|
2016 Other (income)
expense, net includes a charge of $947 million related to an
adjustment of Abbott's holdings of Mylan N.V. ordinary shares to
reflect the share price as of Sept. 30, 2016.
|
|
|
3)
|
2016 Tax expense on
Earnings (Loss) from Continuing Operations includes the impact of
the non-deductible Mylan equity investment adjustment and the
recognition of deferred taxes associated with the pending sale of
AMO, partially offset by a net tax benefit of approximately $105
million as a result of the resolution of various tax positions from
prior years.
|
|
|
4)
|
2016 Net Earnings
from Continuing Operations, excluding Specified Items, excludes net
after-tax charges of $1.240 billion, or $0.83 per share, for
intangible amortization expense, an adjustment to the equity
investment in Mylan, expenses primarily associated with
acquisitions, including bridge facility fees, charges related to
cost reduction initiatives and other expenses and the recognition
of deferred taxes associated with the pending sale of AMO,
partially offset by the favorable impact of a net tax benefit as a
result of the resolution of various tax positions from prior
years.
|
|
|
|
2015 Net Earnings
from Continuing Operations, excluding Specified Items, excludes net
after-tax charges of $225 million, or $0.15 per share, for
intangible amortization expense, expenses associated with cost
reduction initiatives and other expenses related to
acquisitions.
|
|
|
5)
|
2016 Average number
of common shares outstanding excludes approximately 6.7 million
shares related to dilutive common stock options, which would be
antidilutive.
|
Abbott Laboratories
and Subsidiaries
|
Condensed
Consolidated Statement of Earnings
|
Nine Months Ended
September 30, 2016 and 2015
|
(in millions, except
per share data)
|
(unaudited)
|
|
|
|
|
|
|
|
|
9M16
|
|
9M15
|
|
%
Change
|
|
Net Sales
|
$15,520
|
|
$15,217
|
|
2.0
|
|
|
|
|
|
|
|
|
Cost of products
sold, excluding amortization expense
|
6,712
|
|
6,541
|
|
2.6
|
|
Amortization of
intangible assets
|
429
|
|
458
|
|
(6.4)
|
|
Research and
development
|
1,079
|
|
1,036
|
|
4.2
|
|
Selling, general, and
administrative
|
5,063
|
|
5,130
|
|
(1.3)
|
|
Total Operating Cost
and Expenses
|
13,283
|
|
13,165
|
|
0.9
|
|
|
|
|
|
|
|
|
Operating
earnings
|
2,237
|
|
2,052
|
|
9.0
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
203
|
|
49
|
|
n/m
|
1)
|
Net foreign exchange
(gain) loss
|
497
|
|
(63)
|
|
n/m
|
2)
|
Other (income)
expense, net
|
999
|
|
(287)
|
|
n/m
|
3)
|
Earnings from
Continuing Operations before taxes
|
538
|
|
2,353
|
|
(77.1)
|
|
|
|
|
|
|
|
|
Taxes on Earnings
from Continuing Operations
|
240
|
|
442
|
|
(45.7)
|
4)
|
Earnings from
Continuing Operations
|
298
|
|
1,911
|
|
(84.4)
|
|
|
|
|
|
|
|
|
Earnings (Loss) from
Discontinued Operations, net of taxes
|
288
|
|
(7)
|
|
n/m
|
|
Gain on Sale of
Discontinued Operations, net of taxes
|
16
|
|
1,752
|
|
(99.1)
|
|
Net Earnings from
Discontinued Operations, net of taxes
|
304
|
|
1,745
|
|
(82.6)
|
5)
|
|
|
|
|
|
|
|
Net
Earnings
|
$602
|
|
$3,656
|
|
(83.5)
|
|
|
|
|
|
|
|
|
Net Earnings from
Continuing Operations, excluding
|
|
|
|
|
|
|
Specified Items, as
described below
|
$2,310
|
|
$2,326
|
|
(0.7)
|
6)
|
|
|
|
|
|
|
|
Diluted Earnings per
Common Share from:
|
|
|
|
|
|
|
Continuing
Operations
|
$0.20
|
|
$1.26
|
|
(84.1)
|
|
Discontinued
Operations
|
0.20
|
|
1.15
|
|
(82.6)
|
5)
|
Total
|
$0.40
|
|
$2.41
|
|
(83.4)
|
|
|
|
|
|
|
|
|
Diluted Earnings per
Common Share from Continuing
|
|
|
|
|
|
|
Operations, excluding
Specified Items, as described below
|
$1.55
|
|
$1.53
|
|
1.3
|
6)
|
|
|
|
|
|
|
|
Average Number of
Common Shares Outstanding
|
|
|
|
|
|
|
Plus Dilutive Common
Stock Options
|
1,483
|
|
1,509
|
|
|
|
NOTES:
|
|
See tables on page 15
for an explanation of certain non-GAAP financial
information.
|
n/m = Percent change
is not meaningful.
|
See footnotes on the
following page.
|
|
|
1)
|
2016 Interest
expense, net includes amortization expense associated with bridge
facility fees.
|
|
|
2)
|
2016 Net foreign
exchange (gain) loss includes a loss of $481 million related to the
revaluation of Abbott's net monetary assets in Venezuela using the
Dicom exchange rate, which is the Venezuelan government's official
floating exchange rate.
|
|
|
3)
|
2016 Other (income)
expense, net includes a charge of $947 million related to an
adjustment of Abbott's holdings of Mylan N.V. ordinary shares to
reflect the share price as of Sept. 30, 2016.
|
|
|
|
2015 Other (income)
expense, net includes a gain on the sale of a portion of Abbott's
position in Mylan stock and a decrease in the fair value of
contingent consideration related to a business
acquisition.
|
|
|
4)
|
2016 Tax expense on
Earnings from Continuing Operations includes the impact of a net
tax benefit of approximately $250 million as a result of the
resolution of various tax positions from prior years, partially
offset by the unfavorable impact of non-deductible foreign exchange
losses related to Venezuela and an adjustment to the equity
investment in Mylan and the recognition of deferred taxes
associated with the pending sale of AMO.
|
|
|
5)
|
2016 Earnings, net of
taxes and Diluted Earnings per Common Share from Discontinued
Operations primarily reflect the impact of a net tax benefit of
$289 million as a result of the resolution of various tax positions
from prior years.
|
|
|
|
2015 Earnings, net of
taxes and Diluted Earnings per Common Share from Discontinued
Operations reflect the after-tax gain of $1.752 billion on the sale
of the developed markets branded generics pharmaceuticals and
animal health businesses to Mylan on Feb. 27, 2015 and Zoetis on
Feb. 10, 2015, respectively; the first-quarter financial results
from these businesses up to the date of sale; and an unfavorable
adjustment to tax expense as a result of the resolution of various
tax positions from previous years related to AbbVie
operations.
|
|
|
6)
|
2016 Net Earnings
from Continuing Operations, excluding Specified Items, excludes net
after-tax charges of $2.012 billion, or $1.35 per share, for
intangible amortization expense, the foreign exchange loss related
to Venezuela, an adjustment to the equity investment in Mylan,
expenses associated with acquisitions, including bridge facility
fees, other charges related to cost reduction initiatives and other
expenses and the recognition of deferred taxes associated with the
pending sale of AMO, partially offset by the favorable impact of a
net tax benefit as a result of the resolution of various tax
positions from prior years.
|
|
|
|
2015 Net Earnings
from Continuing Operations, excluding Specified Items, excludes net
after-tax charges of $415 million, or $0.27 per share, for
intangible amortization expense, expenses associated with cost
reduction initiatives and other expenses related to acquisitions,
partially offset by a gain on the sale of a portion of Abbott's
position in Mylan stock and a decrease in the fair value of
contingent consideration related to a business
acquisition.
|
NON-GAAP RECONCILIATION OF FINANCIAL INFORMATION FROM
CONTINUING OPERATIONS
Abbott Laboratories
and Subsidiaries
|
Non-GAAP
Reconciliation of Financial Information From Continuing
Operations
|
Third Quarter Ended
September 30, 2016 and 2015
|
(in millions, except
per share data)
|
(unaudited)
|
|
|
|
|
|
3Q16
|
|
|
As
Reported
(GAAP)
|
|
Specified
Items
|
|
As
Adjusted
|
|
% to
Sales
|
|
|
|
|
|
|
|
|
|
Intangible
Amortization
|
|
$140
|
|
$(140)
|
|
--
|
|
|
Gross
Margin
|
|
2,877
|
|
158
|
|
$3,035
|
|
57.3%
|
R&D
|
|
352
|
|
(22)
|
|
330
|
|
6.2%
|
SG&A
|
|
1,628
|
|
(53)
|
|
1,575
|
|
29.7%
|
Interest expense,
net
|
|
95
|
|
(70)
|
|
25
|
|
|
Net foreign exchange
(gain) loss
|
|
9
|
|
(4)
|
|
5
|
|
|
Other (income)
expense, net
|
|
972
|
|
(957)
|
|
15
|
|
|
Earnings (Loss) from
Continuing Operations before taxes
|
|
(179)
|
|
1,264
|
|
1,085
|
|
|
Taxes on Earnings
(Loss) from Continuing Operations
|
|
178
|
|
24
|
|
202
|
|
|
Earnings (Loss) from
Continuing Operations
|
|
(357)
|
|
1,240
|
|
883
|
|
|
Diluted Earnings
(Loss) per Share from Continuing Operations
|
|
$(0.24)
|
|
$0.83
|
|
$0.59
|
|
|
Specified items reflect intangible amortization expense of
$140 million, an adjustment to the
equity investment in Mylan of $947
million, and other expenses of $177
million, primarily associated with acquisitions, including
bridge facility fees, charges related to cost reduction initiatives
and other expenses and the recognition of approximately
$130 million of deferred taxes
associated with the pending sale of AMO, partially offset by a net
tax benefit of approximately $105
million as a result of the resolution of various tax
positions from prior years.
|
3Q15
|
|
As
Reported
(GAAP)
|
|
Specified
Items
|
|
As
Adjusted
|
|
% to
Sales
|
|
|
|
|
|
|
|
|
Intangible
Amortization
|
$151
|
|
$(151)
|
|
--
|
|
|
Gross
Margin
|
2,757
|
|
206
|
|
$2,963
|
|
57.5%
|
R&D
|
378
|
|
(59)
|
|
319
|
|
6.2%
|
SG&A
|
1,666
|
|
(46)
|
|
1,620
|
|
31.4%
|
Other (income)
expense, net
|
(3)
|
|
12
|
|
9
|
|
|
Earnings from
Continuing Operations before taxes
|
714
|
|
299
|
|
1,013
|
|
|
Taxes on Earnings
from Continuing Operations
|
118
|
|
74
|
|
192
|
|
|
Earnings from
Continuing Operations
|
596
|
|
225
|
|
821
|
|
|
Diluted Earnings per
Share from Continuing Operations
|
$0.39
|
|
$0.15
|
|
$0.54
|
|
|
Specified items reflect intangible amortization expense of
$151 million and other expenses of
$148 million, primarily associated
with cost reduction initiatives and acquisitions.
Abbott Laboratories
and Subsidiaries
|
Non-GAAP
Reconciliation of Financial Information From Continuing
Operations
|
Nine Months Ended
September 30, 2016 and 2015
|
(in millions, except
per share data)
|
(unaudited)
|
|
|
|
|
9M16
|
|
|
As
Reported
(GAAP)
|
|
Specified
Items
|
|
As
Adjusted
|
|
% to
Sales
|
|
|
|
|
|
|
|
|
|
|
Intangible
Amortization
|
$429
|
|
$(429)
|
|
--
|
|
|
|
Gross
Margin
|
8,379
|
|
500
|
|
$8,879
|
|
57.2%
|
|
R&D
|
1,079
|
|
(68)
|
|
1,011
|
|
6.5%
|
|
SG&A
|
5,063
|
|
(150)
|
|
4,913
|
|
31.7%
|
|
Interest expense,
net
|
203
|
|
(139)
|
|
64
|
|
|
|
Net foreign exchange
(gain) loss
|
497
|
|
(481)
|
|
16
|
|
|
|
Other (income)
expense, net
|
999
|
|
(962)
|
|
37
|
|
|
|
Earnings from
Continuing Operations before taxes
|
538
|
|
2,300
|
|
2,838
|
|
|
|
Taxes on Earnings
from Continuing Operations
|
240
|
|
288
|
|
528
|
|
|
|
Earnings from
Continuing Operations
|
298
|
|
2,012
|
|
2,310
|
|
|
|
Diluted Earnings per
Share from Continuing Operations
|
$0.20
|
|
$1.35
|
|
$1.55
|
|
|
|
Specified items reflect intangible amortization expense of
$429 million, an adjustment to the
equity investment in Mylan of $947
million, the impact of the foreign exchange loss in
Venezuela of $481 million, and other expenses of $443 million, primarily associated with
acquisitions, including bridge facility fees, and charges related
to cost reduction initiatives and other expenses and the
recognition of approximately $130
million of deferred taxes associated with the pending sale
of AMO, partially offset by a net tax benefit of approximately
$250 million as a result of the
resolution of various tax positions from prior years.
|
9M15
|
|
As
Reported
(GAAP)
|
|
Specified
Items
|
|
As
Adjusted
|
|
% to
Sales
|
|
|
|
|
|
|
|
|
Intangible
Amortization
|
$458
|
|
$(458)
|
|
--
|
|
|
Gross
Margin
|
8,218
|
|
577
|
|
$8,795
|
|
57.8%
|
R&D
|
1,036
|
|
(81)
|
|
955
|
|
6.3%
|
SG&A
|
5,130
|
|
(155)
|
|
4,975
|
|
32.7%
|
Other (income)
expense, net
|
(287)
|
|
294
|
|
7
|
|
|
Earnings from
Continuing Operations before taxes
|
2,353
|
|
519
|
|
2,872
|
|
|
Taxes on Earnings
from Continuing Operations
|
442
|
|
104
|
|
546
|
|
|
Earnings from
Continuing Operations
|
1,911
|
|
415
|
|
2,326
|
|
|
Diluted Earnings per
Share from Continuing Operations
|
$1.26
|
|
$0.27
|
|
$1.53
|
|
|
Specified items reflect intangible amortization expense of
$458 million and other expenses
of $348 million, primarily associated with cost reduction
initiatives and acquisitions, partially offset by a gain on the
sale of a portion of Abbott's position in Mylan stock of
$207 million and a decrease in the
fair value of contingent consideration related to a business
acquisition.
RECONCILIATION OF TAX RATE FOR CONTINUING OPERATIONS
A
reconciliation of the third-quarter tax rates for continuing
operations for 2016 and 2015 is shown below:
|
|
3Q16
|
($ in
millions)
|
|
Pre-Tax
Income
|
|
Taxes
on
Earnings
|
|
Tax
Rate
|
As reported
(GAAP)
|
|
$(179)
|
|
$178
|
|
(99.5%)
|
Specified
items
|
|
1,264
|
|
24
|
|
|
Excluding
specified items
|
|
$1,085
|
|
$202
|
|
18.6%
|
|
|
|
|
|
|
|
|
|
3Q15
|
($ in
millions)
|
|
Pre-Tax
Income
|
|
Taxes on
Earnings
|
|
Tax
Rate
|
As reported
(GAAP)
|
|
$714
|
|
$118
|
|
16.6%
|
Specified
items
|
|
299
|
|
74
|
|
|
Excluding
specified items
|
|
$1,013
|
|
$192
|
|
19.0%
|
A reconciliation of the year-to-date tax rates for continuing
operations for 2016 and 2015 is shown below:
|
|
9M16
|
($ in
millions)
|
|
Pre-Tax
Income
|
|
Taxes
on
Earnings
|
|
Tax
Rate
|
As reported
(GAAP)
|
|
$538
|
|
$240
|
|
44.5%
|
Specified
items
|
|
2,300
|
|
288
|
|
|
Excluding
specified items
|
|
$2,838
|
|
$528
|
|
18.6%
|
|
|
|
|
|
|
|
|
|
9M15
|
($ in
millions)
|
|
Pre-Tax
Income
|
|
Taxes on
Earnings
|
|
Tax
Rate
|
As reported
(GAAP)
|
|
$2,353
|
|
$442
|
|
18.8%
|
Specified
items
|
|
519
|
|
104
|
|
|
Excluding
specified items
|
|
$2,872
|
|
$546
|
|
19.0%
|
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SOURCE Abbott