Abbott Laboratories (ABT) Q4 2014 earnings summary

Executive summary

• 2014 net sales rose to $20.247B from $19.657B; operating earnings increased to $2.599B from $2.133B, while net earnings declined to $2.284B from $2.576B.

• Growth and margin improvement were led by Nutritionals and Diagnostics; unfavorable currency movements weighed on reported sales and costs, while Vascular faced pricing pressure.

Financial highlights

• Net sales were $20.247B in 2014 vs. $19.657B in 2013; operating earnings were $2.599B vs. $2.133B.

• Earnings from continuing operations were $1.721B vs. $1.988B; net earnings were $2.284B vs. $2.576B, including $563M from discontinued operations in 2014.

• Diluted EPS was $1.12 from continuing operations and $1.49 overall in 2014, compared with $1.26 and $1.62, respectively, in 2013.

• Operating cash flow was $3.675B in 2014 vs. $3.324B in 2013; 2013 included ~$435M of one-time net cash outflows related to the AbbVie separation.

Outlook and guidance

• 2015 Nutritionals priorities: expand science-based products and emerging-market reach, while pursuing additional margin improvements.

• 2015 Established Pharmaceuticals priorities: secure product approvals across countries and increase penetration of emerging markets.

• 2015 Diagnostics priorities: develop next-generation platforms, expand in emerging markets and improve segment operating margin; Vascular priorities include MitraClip growth and Absorb development and market expansion.

• R&D spending is planned at ~6%–7% of sales annually; pension contributions are expected to be ~$585M in 2015, including ~$470M for main domestic plans.