Abbott Laboratories turned in stronger-than-expected first-quarter earnings Wednesday, but evidence of moderating growth at the company's biggest profit driver, the rheumatoid arthritis drug Humira, unsettled investors.
After the earnings announcement, shares of the North Chicago-based pharmaceutical and medical-product company dropped $2.05, or 4.6 percent, to $42.66. Shares hit a 52-week low of $41.88 during trading.
Adjusted to exclude special items, Abbott's earnings in the quarter were $1.14 billion, or 73 cents a share, better than the 70 cents a share that analysts on average anticipated. The earnings were up more than 15 percent from the year-ago period's adjusted $988 million, or 63 cents a share.
But Wall Street fretted about Humira, which has been a growth juggernaut in recent years. Humira's worldwide sales rose 17 percent, to $1.02 billion, in the latest quarter, but landed short of the $1.1 billion some experts had expected.
Negative foreign-currency translation from overseas sales pinched revenue, which slipped less than 1 percent, to $6.72 billion.
Abbott acknowledged that U.S. pharmaceutical sales of $1.53 billion landed about $150 million short of its expectations, with Humira responsible for "somewhat more than half" of that shortfall.
Humira's growth rate "appears to be decelerating," Morningstar analyst Damien Conover told investors, adding that the drug will face "further head winds" in the remainder of the year as a rival prepares to launch a competing drug.
"A bottom-line beat is not likely to make up for weak Humira sales, particularly in the U.S.," said Barclays Capital analyst Tony Butler.
Abbott reaffirmed that executives anticipate adjusted full-year earnings between $3.65 to $3.70 a share.
The company's vascular-products group had solid growth in the quarter, helped by strong sales of the Xience stent, and sales at Abbott's nutritionals group grew by 11 percent.
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