July 24--AbbVie reported better-than-expected second-quarter earnings, despite the impact of the strong U.S. dollar. But shares dropped in Friday morning trading on concerns of slower international sales of its blockbuster Humira drug.
Here is a snapshot of the quarter:
By the numbers: Net income was $1.36 billion, or 83 cents a share, in the period ended June 30, up from $1.09 billion, or 68 cents a share, a year ago. Excluding costs related to its Pharmacyclics acquisition, costs related to its separation from Abbott in 2013, restructuring charges and other special items, earnings were $1.08 a share, beating by 2 cents the average of 16 analysts' estimates compiled by Factset.
Revenue grew 11.1 percent to $5.47 billion. AbbVie said unfavorable foreign exchange rates hurt its total sales by 8.3 percentage points.
The "why": Sales of Humira, AbbVie's top moneymaker, increased 7.6 percent, to $3.5 billion, driven by robust demand in the United States. The drug, which treats rheumatoid arthritis and other autoimmune diseases, hauled in $2.1 billion in the U.S., up 28.9 percent.
International sales of Humira grew only 3.6 percent, excluding the impact of foreign exchange rates, down from a 14.8 percent increase in the first quarter. AbbVie blamed the slowdown on shipment timing, but one analyst on the company's conference call expressed doubts about the company's explanation.
Jami Rubin of Goldman Sachs questioned whether Humira was hurt by the sale of a copycat of Merck's arthritis drug Remicade in Europe.
AbbVie CEO Richard Gonzalez shot down the speculation. "We don't have any concerns in that area," he said.
Operating profit margin, excluding one-time items, improved to 44.2 percent of sales, compared with 36.4 percent a year ago. The company said it has reduced costs in manufacturing and purchasing.
Other highlights: Sales of Viekira Pak, its new hepatitis C drug, totaled $385 million in the quarter, which was slightly below analysts' projections, Gonzalez said. The North Chicago-based company also generated $97 million from the U.S. sales of blood-cancer drug Imbruvica, part of the Pharmacyclics acquisition, which closed in May.
2015 outlook: AbbVie maintained its full-year adjusted earnings guidance of $4.10 to $4.30 a share, which would be an increase of 23 percent to 30 percent.
Market reaction: Shares closed at $68.08, down $2.49, or 3.5 percent.
asachdev@tribpub.com
