Libertyville Township-based Abbott Laboratories, the medical device and nutritional products maker that split off its drug unit on Jan. 1, said first-quarter profit rose 55 percent on higher sales of its baby formula and lower taxes.
Profit from continuing operations increased to $544 million, or 34 cents a share, from $351 million, or 22 cents, a year earlier, the Abbott Park, Illinois-based company said in a statement. Earnings excluding one-time items of 42 cents a share beat by 1 cent the average of 16 analyst estimates compiled by Bloomberg.
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Growth in Abbott's core markets, drug-eluting stents and vascular technologies, remains a "work in progress," said Danielle Antalffy, an analyst at Leerink Swann Research in New York, in a note to investors. Only sales of nutritional products significantly outperformed expectations, she said. Extension of the 2012 research and development tax credit provided the company with a $103 million favorable tax adjustment.
"They did a better job controlling costs," said Jason McGorman, an analyst at Bloomberg Industries. "Almost every medical device company will also benefit" from the extension of the R&D tax credit, which came in 2013 and covers all of last year, he said.
Abbott rose 1.8 percent to $37.04 at 9:43 a.m. New York time. AbbVie Inc., the new North Chicago, -based drug company spun off from Abbott, declined 1.5 percent to $41.81.
The company confirmed its 2013 forecast excluding one-time items of $1.98 to $2.04 a share estimated in January.
Abbott may have lost some market share for the stents used to prop open closed heart arteries, Antalffy said. The company won U.S. regulatory approval for its novel Xience Xpedition drug-coated stent in January, setting the stage for future growth even as device markets decline worldwide.
Sales increased 1.8 percent to $5.38 billion. The company introduced 19 new nutritional products during the quarter, driving global sales of that business up 9 percent.
Abbott retained the original company's medical devices, nutritional products, diagnostic tests and generic drugs. AbbVie, which will report earnings on April 26, retained the brand name drugs, including the best-selling Humira for rheumatoid arthritis.