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ABBOTT'S FOURTH QUARTER HOSPITAL/LAB PRODUCT SALES JUMP 12.5% TO $1 BIL., FUELING NET SALES GAIN OF 11.1% TO $2.1 BIL.; PROFIT IS $349 MIL., UP 11%

This article was originally published in The Gray Sheet

Executive Summary

Abbott's in vitro diagnostic line extensions helped drive worldwide sales of hospital and laboratory products ahead 12.5% to $1 bil. in the fourth quarter (ended Dec. 31). For the year, revenues for the segment increased 13.7% to $3.8 bil. The growth in hospital/lab product sales was fueled in part by Abbott's "strengthened worldwide leadership position in in vitro diagnostics," according to a Jan. 14 press release. Among diagnostic products introduced by Abbott during the year were a prostate-specific antigen test for the management and monitoring of prostate cancer; a second-generation test for detecting antibodies to the hepatitis C virus; and a test for simultaneously detecting antibodies to HIV-1 and HIV-2. Abbott also experienced "excellent market acceptance" during the year with its new Cell-Dyn series of hematology instruments, the firm said. In the area of medical specialty products, Abbott launched the Abbott Pain Manager, cited as the first electronic delivery system designed specifically for the administration of epidural analgesia. Abbott also introduced the Quantum pump system for use in its medical nutritional business. During the fourth quarter, Abbott corporate earnings of $349 mil. were up 10.9%, on sales of $2.1 bil., up 11.1%. For the year, revenues increased 14.2% to $7.9 bil. Profit jumped 13.8% to $1.2 bil. Angiography and angioplasty products manufacturer Namic U.S.A. experienced sales growth of 6.4% to $13.5 mil. during the second quarter (ended Nov. 30). In a Dec. 23 release, Namic reported that it was "pleased with customer acceptance and sales" of two new products -- the Aria inflation device and the Perceptor Y-adaptor line during the quarter. However, the firm noted that its sales "continue to fall somewhat short of our expectations, primarily due to the cumulative effects of price reductions given to customers in the prior fiscal year." Namic says it initiated the price cuts "to preserve market share in an increasingly competitive market for angiography and angioplasty accessories." Earnings for the period were flat at $1.4 mil. The results reflect start-up costs and operating expenses associated with Namic's recently acquired cardiovascular catheter products subsidiary, Namic Caribe, formerly known as Novoste Puerto Rico ("The Gray Sheet" May 25, In Brief). Cabot Medical's sales surged 75.4% during the fourth quarter. In a Dec. 22 release, the firm said its line of instruments for use in less-invasive general, gynecological and urological surgical procedures "continues to do well." Cabot's loss for the quarter was $1.3 mil., compared to profit of $800,000 in the same period last year. For the year, Cabot incurred a loss of $2.2 mil. on sales of $55 mil., up 35.3%. The losses reflect costs associated with the acquisition of the Surgitek unit of Bristol-Myers Squibb during the third quarter ("The Gray Sheet" Aug. 31, p. 21). Blood reagent systems manufacturer Immucor had sales growth of 13.7% for the second quarter (ended Nov. 30). Income for the period declined 32.3% to $560,000. The decline is attributed to the firm's strategy of "substantially" increasing research and development efforts, including directing $357,000 toward the development of an automated blood bank instrument project. The loss also reflects "foreign currency transaction losses on purchases of inventory in Italy." Hospital and substance abuse treatment centers operator National Medical Enterprises saw revenues at its general hospital division gain 11% during the second quarter (ended Nov. 30). Sales in the psychiatric division declined 42%, while revenues from National Medical's rehabilitation hospitals slid 6% due to "increased competition and more stringent utilization review." Overall, the firm's sales for the second quarter fell 6.1% to $933.3 mil. National Medical's second quarter income was down 25.8% to $52.4 mil.
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