UPDATE 3-Abbott profit exceeds forecast; all units shine

* Q2 EPS ex-items, $1.01, vs. $1.00 forecast

* Drug sales jump 24.5 pct to $4.91 bln

* Abbott shares up 3.3 pct
(Adds analyst comment, sales details, comparisons with J&J)

By Ransdell Pierson

NEW YORK, July 21 (BestGrowthStock) – Abbott Laboratories Inc
(ABT.N: ) posted higher-than-expected quarterly earnings, helped
by strong sales growth for all of its key units, from
prescription drugs to medical devices.

The company’s shares rose more than 3 percent as analysts
said the results compared favorably with a weak quarterly
performance from diversified healthcare rival Johnson & Johnson
(JNJ.N: ), which is grappling with massive recalls of Tylenol and
other consumer medicines. [ID:nN20247891]

“Abbott is a standout, and its stock is undervalued
relative to its sustained growth potential,” said FAF Advisors
analyst Tim Nelson.

Abbott said second-quarter net income was nearly unchanged
at $1.29 billion, or 83 cents per share.

Excluding special items, profit rose 13.5 percent to $1.01
per share. Analysts on average expected $1.00, according to
Thomson Reuters I/B/E/S.

Company sales increased 17.8 percent to $8.826 billion, a
tad below the Thomson Reuters view of $8.839 billion. Revenue
would have risen only 15.1 percent if not for the weaker
dollar, which boosts the value of overseas sales.

By contrast, J&J reported minuscule revenue growth on
Tuesday and cut its 2010 profit forecast for the second time
this year, citing the repeated recalls as well as pricing
pressures on its drugs in Europe.

Nelson said J&J shares had been trading at an unwarranted
premium to Abbott. J&J’s stock price is 11 times expected 2011
per-share profit, compared with Abbott’s price-to-earnings
ratio of 10.

“Abbott has been producing double-digit profit growth for
several years, and is cheap” by comparison, Nelson said.

Standard & Poor’s on Wednesday held to its “buy” rating on
Abbott, a day after slashing J&J to “hold” from “buy.”

For a graphic on how Abbott stands among global
pharmaceutical companies, click on

Abbott’s global pharmaceutical sales rose 24.5 percent in
the quarter to $4.91 billion, helped by products from its
February acquisition of Solvay SA’s (SOLB.BR: ) drug unit.

Sales of Abbott’s biggest product, its injectable Humira
treatment for rheumatoid arthritis, rose 21.5 percent to $1.59
billion. But that represents a slowdown from growth of 37
percent in the first quarter.

Combined sales of Tricor and Trilipix, medicines that lower
blood fats called triglycerides, rose 15.6 percent to $388

Sales of Abbott’s heart stents, including its top-selling
Xience that has leapfrogged older products sold by Johnson &
Johnson and Boston Scientific Corp (BSX.N: ), jumped 34 percent
to $533 million.

The company’s core laboratory diagnostics reported 6.1
percent sales growth, to $793 million. Sales of pediatric
nutritionals brands rose almost 12 percent to $763 million,
while adult nutritionals rose about 9 percent to $639 million.

Abbott shares were up 3.3 percent at $49.02 in afternoon
New York Stock Exchange trading.

Stock Market Analysis

(Reporting by Ransdell Pierson; Editing by Lisa Von Ahn)

UPDATE 3-Abbott profit exceeds forecast; all units shine