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Abbott Labs cuts 550 workers, 100 here; hundreds more next year

Updated: November 19, 2012 3:07PM

North Chicago-based Abbott Laboratories is laying off 550 workers globally, including 100 in the Chicago metropolitan area, and plans to cut hundreds more next year, the company said Wednesday.

The diversified medical products maker, which will soon split into two companies, said the cuts are across its nutritionals, vascular, branded generics and molecular diagnostics businesses.

The cuts represent less than 1 percent of its global workforce, Abbott said. The company employs roughly 13,000 people in the Chicago area.

“The businesses independently assessed the environment and competitive landscape,” spokesman Scott Stoffel said. “Today’s changes will enable our businesses to align their resources to better meet evolving business needs.”

Abbott also for the first time provided financial profiles of the post-split companies and reported third quarter earnings that nudged past analysts’ expectations.

Executives said Abbott remains on track to complete its separation into two companies Jan. 1, 2013.

AbbVie, which will sell Abbott’s proprietary drugs, including its blockbuster rheumatoid arthritis drug Humira; is forecast to have 2013 sales above $18 billion and gross margin around 76.5 percent, Abbott senior executives said on a conference call with analysts. Research and development investment will be approximately 14 percent of sales, and an annualized dividend of $1.60 per share is expected to begin in 2013, Abbott said.

The other company, which will retain the Abbott name and sell generic medicines, diagnostic tests and nutritional products; is forecast to have 2013 sales of roughly $23 billion and gross margin of roughly 55 percent. Research and development investment will be roughly six percent to seven percent of sales, and an annualized dividend of 56 cents per share is expected to begin in 2013, pre-split Abbott said.

After the separation, more detailed 2013 financial guidance is expected to be released by the companies’ fourth quarter 2012 earnings conference call, Abbott said.

Abbott said it earned $1.94 billion in the third quarter amid strong sales of Humira.

Earnings per share were $1.21. That was up from 19 cents a share a year earlier, when the company earned $303 million as it took a $1.5 billion charge related to litigation over its marketing of its seizure medicine Depakote.

Excluding special items, Abbott earned $2.08 billion, or $1.30 per share, beating Wall Street expectations by 2 cents.

Net sales slipped 0.4 percent to $9.77 billion from $9.82 billion. But excluding foreign exchange, sales rose 4.1 percent.

Sales of Humira rose 10 percent to $2.3 billion.

Abbott reduced the high end of its full-year 2012 guidance range. It said it now expects earnings per share of $5.06 to $5.08, compared to earlier guidance of $5 to $5.10.

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