Abbott to take a pause after deal spree
Abbott Laboratories said on Wednesday it was not looking at acquisitions this year as the healthcare company looks to ease its debt burden after a spree of deals last year.
Abbott last year bolstered its medical device and diagnostic businesses, scooping up rivals St. Jude Medical and Alere for a combined $30 billion.
Shares of the company, which reported better-than-expected quarterly results spurred by these deals, were up 4 percent at $61.62.
The company, which has $24 billion in long-term debt, said it had repaid $4 billion of its debt this month and would continue to pay down debt through the year.
"I don`t have any M&A on the radar screen because I want to hit those debt targets by year-end," Chief Executive Miles White said in a conference call.
Analysts applauded the strong results, with New York-based brokerage Leerink calling Abbott "an execution story" due to the successful integration of the two companies it bought. ORGANIC GROWTH AHEAD
The company said it expects organic sales growth of 6 to 7 percent for 2018, based on the performance of all its units, including its lagging nutrition business.
The nutrition unit`s sales had been hemmed in since mid-2016 after China made it mandatory for manufacturers to re-register baby formulas with the government.
Analysts now say that the China troubles could be behind Abbott.
"Last year there was excess inventory at competitors that were preparing for new regulations in China (now in effect), which hampered results," John Boylan from Edward Jones said.
Net sales rose 42.3 percent to $7.59 billion, beating revenue expectations of $7.39 billion.
The Chicago, Illinois-based company, however, posted a net loss of $828 million, or 48 cents per share, mainly related to a $1.46 billion charge from the U.S. tax overhaul.
Excluding items, Abbott reported profit of 74 cents per share, a cent higher than analysts` average estimate, according to Thomson Reuters I/B/E/S.
The company forecast full-year adjusted profit of $2.80 to $2.90 per share. Analysts were expecting profit of $2.49 per share.
Abbott said it expects an adjusted tax rate of 14.5 percent to 15 percent for 2018. The company reported an adjusted tax rate of 16.5 percent in the fourth quarter.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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