Abbott Reports 11 Percent Ongoing Earnings-Per-Share Growth in Second Quarter; Raises 2011 EPS Guidance Range Abbott (NYSE: ABT) today announced financial results for the second quarter ended June 30, 2011. Diluted earnings per share, excluding specified...

ABBOTT PARK, Ill., July 20, 2011 /PRNewswire/ -- Abbott (NYSE: ABT ) today announced financial results for the second quarter ended June 30, 2011 .

"Abbott is well-positioned for a strong second half of the year as we remain on track for double-digit EPS growth in 2011," said Miles D. White , chairman and chief executive officer, Abbott. "We're also pleased with our growth in emerging markets, as well as the progress of our broad-based pipeline, including several new product approvals, regulatory submissions and clinical trial initiations."

The following is a summary of second-quarter 2011 sales by major business category.

The following is a summary of first-half 2011 sales by major business category.

The following is a summary of second-quarter 2011 sales for select products.

The following is a summary of first-half 2011 sales for select products.

Business Highlights

Abbott raises ongoing EPS guidance; confirms strong growth outlook for 2011

Abbott is raising its previous ongoing earnings-per-share guidance range for the full-year 2011, based on strong performance to date and the outlook for the remainder of the year. As a result, the new guidance range for full-year 2011 ongoing earnings per share is $4.58 to $4.68 , confirming Abbott's outlook for double-digit growth at the midpoint of the range. The previously issued guidance range was $4.54 to $4.64 .

Abbott forecasts specified items for the full-year 2011 of approximately $0.60 per share, primarily associated with acquisition integration/cost reduction initiatives, in-process R&D, partially offset by the favorable impact of the resolution of various international and U.S. tax positions. Including these specified items, projected earnings per share under Generally Accepted Accounting Principles (GAAP) would be $3.98 to $4.08 for the full-year 2011.

Abbott declares 350th quarterly dividend

On June 10, 2011 , the board of directors of Abbott declared the company's quarterly common dividend of 48 cents per share. The cash dividend is payable Aug. 15, 2011 , to shareholders of record at the close of business on July 15, 2011 . This marks the 350th consecutive dividend paid by Abbott since 1924.

Abbott is a global, broad-based health care company devoted to the discovery, development, manufacture and marketing of pharmaceuticals and medical products, including nutritionals, devices and diagnostics. The company employs nearly 90,000 people and markets its products in more than 130 countries.

Abbott's news releases and other information are available on the company's Web site at www.abbott.com . Abbott will webcast its live second-quarter earnings conference call through its Investor Relations Web site 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, 2010, 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.

Questions & Answers

Q1) What drove the strong sales growth?

A1) Beginning this year, we have characterized Abbott's major businesses into three categories, based on their underlying attributes. These include:

Proprietary Pharmaceuticals sales increased 13 percent, including 4.1 percent from favorable foreign exchange, driven by strong growth across a number of key franchises in the United States and internationally. HUMIRA® was a significant contributor to growth in the quarter with U.S. sales growth of 18.5 percent and International sales growth of 30.6 percent.

Durable Growth Businesses sales increased 7.5 percent, including 5.1 percent favorable foreign exchange, driven by Established Pharmaceuticals and steady sales growth in Core Laboratory Diagnostics, Diabetes Care and Point of Care Diagnostics businesses. Established Pharmaceuticals sales, which include sales of our branded generics pharmaceuticals outside of the United States , increased 10.3 percent, including the contribution from the Piramal Healthcare Solutions acquisition. Worldwide Nutritional products sales growth was 5.4 percent, with 13.7 percent growth in International Nutritionals. Nutritional sales in the United States during the quarter were negatively impacted by the infant nutrition recall that was announced in September 2010 , as previously forecasted.

Innovation-Driven Device Business sales increased 3.1 percent, including 5 percent favorable foreign exchange, driven by double-digit growth in Molecular Diagnostics, 10.4 percent growth in International Vascular and 7.5 percent growth in Medical Optics.

Q2) What were emerging markets sales?

A2) Emerging market sales within each division were as follows (dollars in millions):

Abbott total company emerging markets sales grew 23.2 percent in the quarter, reflecting strong growth across all divisions, underscoring the importance of these markets to Abbott's growth profile. In our Established Pharmaceuticals business, we saw strong performance in Russia , India and China . In Nutritionals, we saw particularly strong growth in Asia and Latin America , where we are expanding our presence and gaining share with the introduction of new products.

In our Diagnostics business, we continue to perform well in China , where we are placing new ARCHITECT® systems and continuing to penetrate the market. And, in our Vascular business, we saw strong growth across all key emerging markets, driven by double-digit procedure volumes in many of these markets, as well as Abbott market share gains.

Q3) What was the gross margin ratio in the quarter?

A3) The gross margin ratio before and after specified items is shown below (dollars in millions):

The adjusted gross margin ratio of 60.2 percent in the second quarter was above our previous outlook for the quarter, driven by favorable product mix.

Q4) What drove SG&A and R&D investment?

A4) Both SG&A and R&D investment reflects Abbott's continued investment in programs to drive future growth. R&D expense reflects continued investment in Abbott's broad-based pipeline, including programs in vascular devices, immunology, neuroscience, oncology and HCV.

Q5) What was the tax rate?

A5) The ongoing tax rate this quarter was 15.2 percent, in line with Abbott's previous forecast, and reconciled below (dollars in millions):

Reported taxes on earnings in the quarter includes a favorable adjustment to tax expense of $519 million , or $0.33 per share, as a result of the resolution of various prior years' international and U.S. tax positions. This favorable item is classified as a specified item and excluded from ongoing results.

Q6) How did specified items affect reported results?

A6) Specified items impacted second-quarter results as follows:

Restructuring/integration (acquisitions/cost reductions) is primarily associated with restructuring and integration costs for the Solvay Pharmaceuticals acquisition. This item also includes previously announced cost reduction initiatives to improve efficiencies in the vascular and core laboratory diagnostic businesses. Acquired in-process research and development is related to an agreement with Biotest on the development of BT-061 for RA, psoriasis and other immune-related diseases, as well as an agreement with Reata to develop and commercialize bardoxolone methyl outside the U.S., excluding certain Asian markets. Intangible asset impairment is related to the write down of an acquired research and development intangible asset in a non-segment business.

2011 Taxes on earnings includes a favorable adjustment to tax expense of $519 million , or $0.33 per share, as a result of the resolution of various prior years' international and U.S. tax positions. The impact of the remaining specified items by Consolidated Statement of Earnings line item is as follows (dollars in millions):

Q7) What are the key areas of focus in Abbott's broad-based pipeline?

A7) We continue to advance our broad-based pipeline. In the first half of 2011, we launched several new products or indications, including Lupron 6-Month Depot, Androgel 1.62%, the Creon infant-specific dosage, XIENCE nano, TREK® Coronary Balloon System and the FreeStyle InsuLinx Blood Glucose Monitoring System. We advanced elotuzumab and bardoxolone into Phase 3 development and submitted XIENCE PRIME™, HUMIRA ulcerative colitis (UC) and our ALK gene molecular diagnostics test for regulatory review. Following are highlights from breakthrough research across our pharmaceuticals, medical products and nutritionals pipelines: