Full Press Release Details
ABBOTT PARK, Ill., Oct. 20 /PRNewswire-FirstCall/ -- Abbott (NYSE: ABT ) today announced financial results for the third quarter ended Sept. 30, 2010 .
"Abbott delivered strong performance in the quarter as we confirmed our double-digit growth outlook for the full year," said Miles D. White , chairman and chief executive officer, Abbott. "During the quarter, we announced an agreement to expand our pharmaceutical pipeline with an attractive late-stage asset for the treatment of chronic kidney disease, which follows the addition of several novel compounds earlier this year. In addition, we completed the acquisition of Piramal's Healthcare Solutions business and finalized the integration planning for the Solvay Pharmaceuticals acquisition. The strategic actions we've taken across our global businesses position us well in high-growth emerging markets as well as promising new therapeutic areas."
The following is a summary of third-quarter 2010 sales.
| Quarter Ended 9/30/10 | ||||||||
| (dollars in millions) | % Change vs. 3Q09 | |||||||
| Sales | Reported | Foreign Exchange | Operational | |||||
| Total Sales | $8,675 | 11.8 | (1.0) | 12.8 | ||||
| Total International Sales | $4,813 | 16.2 | (2.0) | 18.2 | ||||
| Total U.S. Sales | $3,862 | 6.6 | -- | 6.6 | ||||
| Worldwide Pharmaceutical Sales | $4,937 | 21.7 | a | (1.6) | 23.3 | |||
| International Pharmaceuticals | $2,674 | 29.7 | a | (3.2) | 32.9 | |||
| U.S. Pharmaceuticals | $2,263 | 13.5 | a | -- | 13.5 | |||
| Worldwide Nutritional Sales | $1,365 | (1.5) | b | 0.8 | (2.3) | |||
| International Nutritionals | $739 | 1.9 | 1.5 | 0.4 | ||||
| U.S. Nutritionals | $626 | (5.3) | b | -- | (5.3) | |||
| Worldwide Diagnostics Sales | $916 | 0.8 | (1.4) | 2.2 | ||||
| International Diagnostics | $664 | (1.7) | (1.9) | 0.2 | ||||
| U.S. Diagnostics | $252 | 8.2 | -- | 8.2 | ||||
| Worldwide Vascular Sales | $790 | 18.6 | (0.9) | 19.5 | ||||
| International Vascular | $378 | 39.7 | (2.3) | 42.0 | ||||
| U.S. Vascular | $412 | 4.2 | -- | 4.2 | ||||
| Other Sales | $667 | (10.6) | (1.0) | (9.6) | ||||
| Note: See "Consolidated Statement of Earnings" for more information. a Includes impact from the acquisition of Solvay Pharmaceuticals, which closed on Feb. 15, 2010. b Includes impact from a nutritional product recall announced in September 2010. |
The following is a summary of nine months ended September 2010 sales.
| Nine Months Ended 9/30/10 | ||||||||
| (dollars in millions) | % Change vs. 9M09 | |||||||
| Sales | Reported | Foreign Exchange | Operational | |||||
| Total Sales | $25,199 | 14.7 | 1.8 | 12.9 | ||||
| Total International Sales | $14,293 | 21.2 | 3.4 | 17.8 | ||||
| Total U.S. Sales | $10,906 | 7.1 | -- | 7.1 | ||||
| Worldwide Pharmaceutical Sales | $13,955 | 19.9 | a | 1.8 | 18.1 | |||
| International Pharmaceuticals | $7,866 | 27.6 | a | 3.3 | 24.3 | |||
| U.S. Pharmaceuticals | $6,089 | 11.2 | a | -- | 11.2 | |||
| Worldwide Nutritional Sales | $4,099 | 6.4 | b | 2.0 | 4.4 | |||
| International Nutritionals | $2,152 | 12.4 | 4.1 | 8.3 | ||||
| U.S. Nutritionals | $1,947 | 0.6 | b | -- | 0.6 | |||
| Worldwide Diagnostics Sales | $2,779 | 6.8 | 2.4 | 4.4 | ||||
| International Diagnostics | $2,045 | 6.9 | 3.3 | 3.6 | ||||
| U.S. Diagnostics | $734 | 6.3 | -- | 6.3 | ||||
| Worldwide Vascular Sales | $2,372 | 20.5 | 1.5 | 19.0 | ||||
| International Vascular | $1,110 | 41.6 | 3.8 | 37.8 | ||||
| U.S. Vascular | $1,262 | 6.5 | -- | 6.5 | ||||
| Other Sales | $1,994 | 4.1 | 1.1 | 3.0 | ||||
| Note: See "Consolidated Statement of Earnings" for more information. a Includes impact from the acquisition of Solvay Pharmaceuticals, which closed on Feb. 15, 2010. b Includes impact from a nutritional product recall announced in September 2010. |
The following summarizes global sales for selected products and related foreign exchange impacts compared to the prior year.
| Quarter Ended 9/30/10 | ||||||||
| (dollars in millions) | ||||||||
| Global Sales | ||||||||
| Global | % Change vs. 3Q09 | |||||||
| Sales | Reported | Foreign Exchange | Operational | |||||
| Pharmaceutical Products | ||||||||
| HUMIRA | $1,679 | 12.6 | (3.5) | 16.1 | ||||
| TRILIPIX/TriCor | $404 | 22.1 | -- | 22.1 | ||||
| Kaletra | $328 | (7.2) | (2.4) | (4.8) | ||||
| Niaspan | $225 | 4.7 | -- | 4.7 | ||||
| Lupron | $189 | (3.3) | (0.4) | (2.9) | ||||
| Synthroid | $143 | 6.9 | 1.0 | 5.9 | ||||
| Nutritional Products | ||||||||
| Pediatric Nutritionals | $679 | (9.3) | a | 1.3 | (10.6) | |||
| Adult Nutritionals | $681 | 7.8 | 0.2 | 7.6 | ||||
| Medical Products | ||||||||
| Core Laboratory Diagnostics | $753 | (1.6) | (1.4) | (0.2) | ||||
| Coronary Stents | $505 | 29.9 | 0.1 | 29.8 | ||||
| Diabetes Care | $318 | 0.1 | (2.4) | 2.5 | ||||
| Medical Optics | $254 | (3.4) | 0.4 | (3.8) | ||||
| Molecular Diagnostics | $95 | 16.0 | (2.8) | 18.8 | ||||
| a Includes impact from a nutritional product recall announced in September 2010. |
The following is a summary of Abbott's third-quarter 2010 sales for selected products.
| Quarter Ended 9/30/10 | ||||||||||||
| (dollars in millions) | International | |||||||||||
| U.S. | % Change vs. 3Q09 | |||||||||||
| % Change | Foreign | |||||||||||
| Sales | vs. 3Q09 | Sales | Reported | Exchange | Operational | |||||||
| Pharmaceutical Products | ||||||||||||
| HUMIRA | $757 | 8.1 | $922 | 16.6 | (6.6) | 23.2 | ||||||
| TRILIPIX/TriCor | $341 | 3.2 | $63 | n/m | n/m | n/m | ||||||
| Kaletra | $87 | (23.6) | $241 | 0.7 | (3.6) | 4.3 | ||||||
| Niaspan | $225 | 4.7 | -- | -- | -- | -- | ||||||
| Lupron | $124 | (3.8) | $65 | (2.4) | (1.2) | (1.2) | ||||||
| Synthroid | $118 | 7.2 | $25 | 5.6 | 5.7 | (0.1) | ||||||
| Nutritional Products | ||||||||||||
| Pediatric Nutritionals | $261 | (19.1) | a | $418 | (1.9) | 2.2 | (4.1) | |||||
| Adult Nutritionals | $359 | 8.2 | $322 | 7.3 | 0.4 | 6.9 | ||||||
| Medical Products | ||||||||||||
| Core Laboratory Diagnostics | $152 | 2.9 | $601 | (2.7) | (1.7) | (1.0) | ||||||
| Coronary Stents | $259 | 6.0 | $246 | 70.5 | 0.2 | 70.3 | ||||||
| Diabetes Care | $134 | 7.7 | $184 | (4.7) | (4.0) | (0.7) | ||||||
| Medical Optics | $104 | 8.3 | $150 | (10.2) | 0.7 | (10.9) | ||||||
| Molecular Diagnostics | $47 | 23.2 | $48 | 9.7 | (5.2) | 14.9 | ||||||
| n/m = Not meaningful a Includes impact from a nutritional product recall announced in September 2010. |
The following summarizes global sales for selected products and related foreign exchange impacts compared to the prior year.
| Nine Months Ended 9/30/10 | ||||||||
| (dollars in millions) | ||||||||
| Global Sales | ||||||||
| Global | % Change vs. 9M09 | |||||||
| Sales | Reported | Foreign Exchange | Operational | |||||
| Pharmaceutical Products | ||||||||
| HUMIRA | $4,670 | 22.1 | 1.5 | 20.6 | ||||
| TRILIPIX/TriCor | $1,083 | 17.9 | -- | 17.9 | ||||
| Kaletra | $914 | (7.5) | 1.1 | (8.6) | ||||
| Niaspan | $640 | 6.6 | -- | 6.6 | ||||
| Lupron | $548 | (6.2) | 2.0 | (8.2) | ||||
| Synthroid | $395 | 11.6 | 2.5 | 9.1 | ||||
| Nutritional Products | ||||||||
| Pediatric Nutritionals | $2,142 | 3.9 | a | 2.1 | 1.8 | |||
| Adult Nutritionals | $1,925 | 10.3 | 2.0 | 8.3 | ||||
| Medical Products | ||||||||
| Core Laboratory Diagnostics | $2,308 | 4.6 | 2.7 | 1.9 | ||||
| Coronary Stents | $1,493 | 25.7 | 2.0 | 23.7 | ||||
| Diabetes Care | $938 | 3.1 | 1.8 | 1.3 | ||||
| Medical Optics | $784 | 36.8 | 0.9 | 35.9 | ||||
| Molecular Diagnostics | $271 | 22.4 | 0.9 | 21.5 | ||||
| a Includes impact from a nutritional product recall announced in September 2010. |
The following is a summary of Abbott's nine months ended September 2010 sales for selected products.
| Nine Months Ended 9/30/10 | ||||||||||||
| (dollars in millions) | International | |||||||||||
| U.S. | % Change vs. 9M09 | |||||||||||
| % Change | Foreign | |||||||||||
| Sales | vs. 9M09 | Sales | Reported | Exchange | Operational | |||||||
| Pharmaceutical Products | ||||||||||||
| HUMIRA | $1,996 | 14.4 | $2,674 | 28.5 | 2.8 | 25.7 | ||||||
| TRILIPIX/TriCor | $937 | 2.0 | $146 | n/m | n/m | n/m | ||||||
| Kaletra | $252 | (18.6) | $662 | (2.4) | 1.6 | (4.0) | ||||||
| Niaspan | $640 | 6.6 | -- | -- | -- | -- | ||||||
| Lupron | $353 | (11.5) | $195 | 5.2 | 6.2 | (1.0) | ||||||
| Synthroid | $320 | 9.3 | $75 | 22.6 | 14.4 | 8.2 | ||||||
| Nutritional Products | ||||||||||||
| Pediatric Nutritionals | $905 | (4.5) | a | $1,237 | 10.9 | 3.8 | 7.1 | |||||
| Adult Nutritionals | $1,011 | 6.9 | $914 | 14.4 | 4.4 | 10.0 | ||||||
| Medical Products | ||||||||||||
| Core Laboratory Diagnostics | $444 | (0.5) | $1,864 | 5.9 | 3.4 | 2.5 | ||||||
| Coronary Stents | $799 | 4.0 | $694 | 65.4 | 5.6 | 59.8 | ||||||
| Diabetes Care | $384 | 3.3 | $554 | 3.0 | 3.0 | -- | ||||||
| Medical Optics | $304 | 26.2 | $480 | 44.4 | 1.5 | 42.9 | ||||||
| Molecular Diagnostics | $134 | 24.4 | $137 | 20.5 | 1.7 | 18.8 | ||||||
| n/m = Not meaningful a Includes impact from a nutritional product recall announced in September 2010. |
Business Highlights
Abbott confirms double-digit ongoing earnings-per-share growth for 2010
Abbott is confirming its 2010 ongoing earnings-per-share guidance and raising the lower end of its previous guidance range. As a result, Abbott's ongoing earnings-per-share guidance for full-year 2010 is now $4.16 to $4.18 , excluding specified items.
Abbott forecasts specified items for the full-year 2010 of approximately $1.24 per share, primarily associated with acquisition integration, cost reduction initiatives, a litigation reserve, in-process research and development, product recall and withdrawal costs, impairment of sibutramine related intangible asset and the one-time impact of the devaluation of the Venezuelan bolivar on balance sheet translation. Including these specified items, projected earnings per share under Generally Accepted Accounting Principles (GAAP) would be $2.92 to $2.94 for the full-year 2010.
Abbott declares quarterly dividend
On Sept. 16, 2010 , the board of directors of Abbott declared the company's quarterly common dividend of 44 cents per share, an increase of 10 percent over the prior year. The cash dividend is payable Nov. 15, 2010 , to shareholders of record at the close of business on Oct. 15, 2010 . This marks the 347th 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 third-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, 2009, in Item 1A, "Risk Factors," to our quarterly report on Securities and Exchange Commission Form 10-Q for the quarter ended March 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.
| Abbott Laboratories and Subsidiaries Consolidated Statement of Earnings Third Quarter Ended September 30, 2010 and 2009 (in millions, except per share data) (unaudited) | |||||||
| 2010 | 2009 | % Change | |||||
| Net Sales | $ 8,675 | $ 7,761 | 11.8 | ||||
| Cost of products sold | 3,742 | 3,360 | 11.3 | ||||
| Research and development | 1,079 | 676 | 59.7 | ||||
| Selling, general and administrative | 2,673 | 2,085 | 28.2 | ||||
| Total Operating Cost and Expenses | 7,494 | 6,121 | 22.4 | ||||
| Operating earnings | 1,181 | 1,640 | (28.0) | ||||
| Net interest expense | 133 | 97 | 38.8 | ||||
| Net foreign exchange (gain) loss | (21) | -- | n/m | ||||
| Other (income) expense, net | 5 | (328) | n/m | 1) | |||
| Earnings before taxes | 1,064 | 1,871 | (43.1) | ||||
| Taxes on earnings | 173 | 391 | (55.6) | ||||
| Net Earnings | $ 891 | $ 1,480 | (39.8) | ||||
| Net Earnings Excluding Specified Items, as described below | $ 1,632 | $ 1,429 | 14.1 | 2) | |||
| Diluted Earnings per Common Share | $ 0.57 | $ 0.95 | (40.0) | ||||
| Diluted Earnings Per Common Share, Excluding Specified Items, | |||||||
| as described below | $ 1.05 | $ 0.92 | 14.1 | 2) | |||
| Average Number of Common Shares Outstanding Plus Dilutive | |||||||
| Common Stock Options and Awards | 1,554 | 1,552 |
| 1) | Other (income) expense, net in 2009 includes a favorable patent litigation settlement and ongoing contractual payments from Takeda associated with the conclusion of the TAP joint venture. The patent litigation settlement has been treated as a specified item and excluded from ongoing operations. | |
| 2) | 2010 Net Earnings Excluding Specified Items excludes after-tax charges of $513 million, or $0.33 per share, associated primarily with the acquisition of Solvay Pharmaceuticals, including recently announced restructuring plans, as well as cost reduction initiatives, $70 million, or $0.05 per share, for costs of a nutritional product recall and the withdrawal of sibutramine, and $158 million, or $0.10 per share, for impairment of the intangible asset related to sibutramine. | |
| 2009 Net Earnings Excluding Specified Items excludes an after-tax gain of $178 million, or $0.11 per share, relating to a patent litigation settlement. This was partially offset by after-tax charges of $127 million, or $0.08 per share, primarily for integration and cost reduction initiatives. | ||
| NOTE: See attached questions and answers section for further explanation of Consolidated Statement of Earnings line items. | ||
| n/m = Percent change is not meaningful. |
| Abbott Laboratories and Subsidiaries Consolidated Statement of Earnings Nine Months Ended September 30, 2010 and 2009 (in millions, except per share data) (unaudited) | |||||||
| 2010 | 2009 | % Change | |||||
| Net Sales | $ 25,199 | $ 21,975 | 14.7 | ||||
| Cost of products sold | 10,620 | 9,425 | 12.7 | ||||
| Research and development | 2,667 | 1,997 | 33.6 | ||||
| Acquired in-process research and development | 75 | -- | n/m | ||||
| Selling, general and administrative | 7,579 | 6,181 | 22.6 | ||||
| Total Operating Cost and Expenses | 20,941 | 17,603 | 19.0 | ||||
| Operating earnings | 4,258 | 4,372 | (2.6) | ||||
| Net interest expense | 319 | 287 | 10.8 | ||||
| Net foreign exchange (gain) loss | 8 | 29 | (71.6) | ||||
| Other (income) expense, net | (14) | (1,315) | n/m | 1) | |||
| Earnings before taxes | 3,945 | 5,371 | (26.5) | ||||
| Taxes on earnings | 760 | 1,164 | (34.7) | ||||
| Net Earnings | $ 3,185 | $ 4,207 | (24.3) | ||||
| Net Earnings Excluding Specified Items, as described below | $ 4,476 | $ 3,960 | 13.0 | 2) | |||
| Diluted Earnings per Common Share | $ 2.04 | $ 2.70 | (24.4) | 3) | |||
| Diluted Earnings Per Common Share, Excluding Specified Items, | |||||||
| as described below | $ 2.87 | $ 2.54 | 13.0 | 2) | |||
| Average Number of Common Shares Outstanding Plus Dilutive | |||||||
| Common Stock Options and Awards | 1,556 | 1,553 |
| 1) | Other (income) expense, net, in 2009 includes the derecognition of a contingent liability and a favorable patent litigation settlement. These items have been treated as specified items and excluded from ongoing operations. 2010 and 2009 also include ongoing contractual payments from Takeda associated with the conclusion of the TAP joint venture. | |
| 2) | 2010 Net Earnings Excluding Specified Items excludes after-tax charges of $689 million, or $0.44 per share, associated primarily with the acquisition of Solvay Pharmaceuticals, including recently announced restructuring plans, as well as cost reduction initiatives, $115 million, or $0.07 per share, for the one-time impact of the devaluation of the Venezuelan bolivar on balance sheet translation, $75 million, or $0.05 per share, relating to acquired in-process research and development related to the Neurocrine collaboration, $106 million, or $0.07 per share, for a litigation reserve, $60 million, or $0.04 per share, for specific health care reform impact on deferred tax assets, $88 million, or $0.06 per share, for costs of a nutritional product recall and the withdrawal of sibutramine, and $158 million, or $0.10 per share, for impairment of the intangible asset related to sibutramine. | |
| 2009 Net Earnings Excluding Specified Items excludes an after-tax gain of $505 million, or $0.32 per share, relating to the derecognition of a contingent liability that was recorded in connection with the conclusion of the TAP joint venture and an after-tax gain of $178 million, or $0.11 per share, relating to a patent litigation settlement. This was partially offset by $122 million, or $0.08 per share, primarily relating to costs associated with the acquisition of Advanced Medical Optics, $78 million, or $0.05 per share, for litigation settlements and $236 million, or $0.14 per share, for cost reduction initiatives and costs associated with a delayed product launch. | ||
| 3) | Effective January 1, 2009, Abbott adopted FSP EITF 03-6-1, "Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities," which requires the allocation of net earnings between common shareholders and participating securities holders when computing earnings per share. As a result, net earnings allocated to common shares for the nine months ended September 30, 2010 and 2009 was $3.177 billion and $4.196 billion, respectively. | |
| NOTE: See attached questions and answers section for further explanation of Consolidated Statement of Earnings line items. | ||
| n/m = Percent change is not meaningful. |
Questions & Answers
Q1) What drove the growth of Worldwide Pharmaceutical sales?
A1) Worldwide Pharmaceutical sales increased 21.7 percent, including an unfavorable 1.6 percent effect of exchange rates, driven by strong international pharmaceutical sales growth of approximately 30 percent. Sales in the quarter reflected a contribution from the Solvay acquisition, which closed in February 2010 .
Growth in the quarter was led by HUMIRA, with global operational sales growth of 16.1 percent, which excludes an unfavorable 3.5 percent effect of exchange rates. International operational sales growth for HUMIRA was 23.2 percent, which excludes an unfavorable 6.6 percent effect of exchange rates. International anti-TNF market growth trends remain strong, and HUMIRA maintains a market-leading position in many of the international markets. Global lipid franchise sales growth was 22 percent, including the international TriCor sales contribution from the Solvay acquisition. U.S. growth in both the TRILIPIX/TriCor franchise and Niaspan exceeded the growth rate of the overall cholesterol market.
Q2) What drove the performance in Worldwide Vascular, Worldwide Nutritional and Worldwide Diagnostics sales?
A2) Double-digit growth in Worldwide Vascular sales was driven by international vascular sales growth of approximately 40 percent. Abbott holds the number-one global position in drug-eluting stents, metallic stents and guidewires. Abbott's drug-eluting stent franchise, which includes XIENCE V and XIENCE PRIME, continues to perform well, including strong international performance in Europe and Japan .
Worldwide Nutritional products sales decreased 1.5 percent, including a favorable 0.8 percent impact from exchange. Growth in the United States during the quarter was negatively impacted by product returns and lower shipments resulting from an infant nutrition recall that was announced in September. Excluding the recall, U.S. nutritionals sales growth would have been in the high-single digits. International nutritional sales growth was impacted by a difficult comparison to the prior year due to new product launches that occurred in the third quarter of 2009 in many international markets.
Growth in Worldwide Diagnostics was driven by high-single digit growth in U.S. diagnostics sales, with continued double-digit growth in Abbott's Molecular and Point of Care diagnostics businesses.
Q3) What drove the strong increase in the third-quarter gross margin ratio?
A3) The gross margin ratio before and after specified items is shown below (dollars in millions):
| 3Q10 | ||||
| Cost of Products Sold | Gross Margin | Gross Margin % | ||
| As reported (GAAP) | $3,742 | $4,933 | 56.9% | |
| Adjusted for specified items: | ||||
| Restructuring/integration (acquisitions/cost reductions) | ($141) | $141 | 1.6% | |
| Product recall/withdrawal costs | ($84) | $84 | 0.9% | |
| Impairment of sibutramine intangible asset | ($189) | $189 | 2.2% | |
| As adjusted | $3,328 | $5,347 | 61.6% |
The adjusted gross margin ratio of 61.6 percent was above Abbott's previous forecast and increased significantly from the prior year when the adjusted gross margin ratio was 57.1 percent. This increase was driven by strong performance across several businesses, including vascular, pharmaceuticals, diabetes and diagnostics, as well as a favorable impact from foreign exchange rates.
Q4) What drove SG&A and R&D investment in the quarter?
A4) In the third quarter, both SG&A and R&D investment increased strong double-digits, reflecting Abbott's continued investment in programs to drive future growth, as well as increases associated with the addition of Solvay Pharmaceuticals. Ongoing R&D expense as a percentage of sales was 10.6 percent, reflecting continued investment in Abbott's broad-based pipeline, including programs in vascular devices, immunology, neuroscience, oncology and HCV.
Q5) What was the tax rate for the third-quarter 2010?
A5) The ongoing tax rate this quarter was 16.3 percent, in line with Abbott's previous forecast.
Q6) How did specified items affect reported results?
A6) Specified items impacted third-quarter results as follows:
| 3Q10 | ||||
| (dollars in millions, except earnings-per-share) | Earnings | |||
| Pre- tax | After- tax | EPS | ||
| As reported (GAAP) | $1,064 | $891 | $0.57 | |
| Adjusted for specified items: | ||||
| Restructuring/integration (acquisitions/cost reductions) | $611 | $513 | $0.33 | |
| Product recall/withdrawal costs | $84 | $70 | $0.05 | |
| Impairment of sibutramine intangible asset | $189 | $158 | $0.10 | |
| As adjusted | $1,948 | $1,632 | $1.05 |
Restructuring/integration (acquisitions/cost reductions) is associated with acquisition closing, restructuring, and integration costs, primarily the recently announced Solvay Pharmaceuticals integration actions. This item also includes cost reduction initiatives to improve efficiencies, primarily related to previously announced efforts in the core laboratory diagnostic business.
Product recall/withdrawal costs relate to a nutritional product recall and voluntary withdrawal of sibutramine in the United States , Canada , Australia and other countries, including inventory destruction and other related expenses. Impairment of sibutramine intangible asset relates to the non-cash write-off of the remaining balance of an intangible asset attributed to the product at time of the acquisition.
The impact of specified items by Consolidated Statement of Earnings line item is as follows (dollars in millions):
| 3Q10 | |||||
| Cost of Products Sold | R&D | SG&A | Other (Income)/ Expense | ||
| As reported (GAAP) | $3,742 | $1,079 | $2,673 | $5 | |
| Adjusted for specified items: | |||||
| Restructuring/integration (acquisitions/cost reductions) | ($141) | ($163) | ($303) | ($4) | |
| Product recall/withdrawal costs | ($84) | -- | -- | -- | |
| Impairment of sibutramine intangible asset | ($189) | -- | -- | -- | |
| As adjusted | $3,328 | $916 | $2,370 | $1 |
Q7) What are the key areas of focus in Abbott's broad-based pipeline?
A7) Across its businesses, Abbott has more than 350 clinical trials underway and expects to deliver more than 75 new products or indications over the next five years. Following are select highlights from breakthrough research across both pharmaceuticals and medical products pipelines: