Why Abbott's profits outperformed Q2 expectations
- Abbott's overall revenues increased by 2.2% to $5.17 billion, with EPS of $0.52 versus the $0.50 forecast by analysts for Q2 2015.
- Generic drug sales in emerging markets were up 46%.
- Sales of medical devices including stents fell 61% to $129.9 billion.
Abbott's strategy of focusing more on emerging markets is paying off. In May 2014, the company acquired CFR Pharmaceuticals, a Chilean company which operates in 15 Latin American markets. Then in July 2014, Abbott sold its established markets generics division in exchange for 110 million shares of Mylan. Since then, the emerging markets business has continued to flourish.
In addition to solid emerging market sales, Abbott has benefited from the strength of its shares in Mylan, as Teva attempts to acquire the latter company. Add to that the fact that Abbott sold roughly one-third of its Mylan shares in February, providing an infusion of cash.
The net effect has been better-than-expected earnings. Abbott is maintaining its adjusted earnings forecast of $2.10 to $2.20 per share for 2015.