Abbott Labs Posts Higher Profit, Revenue

Abbott Laboratories Inc. said second-quarter earnings jumped 38%, helped by strong sales of two arthritis treatments and the company’s line of diagnostic products.

But the company also reported weaker profit margin and said third-quarter earnings would be slightly below Wall Street expectations, sending its shares down 4%. The stock had closed near a three-year high Tuesday.

Abbott said it would immediately cut 700 jobs, or about 1% of its workforce, while consolidating manufacturing operations, particularly in the company’s home base of Illinois.

Profit in the period ended June 30 rose to $877 million, or 56 cents a share, from $635 million, or 40 cents, a year earlier.

Excluding special items, Abbott earned 58 cents a share, a penny better than the average estimate of analysts polled by Reuters Estimates.

Abbott shares fell $2.07 to $47.65.

A.G. Edwards analyst Jan Wald said he was not greatly concerned about the Abbott stock sell-off because the company’s experimental drugs and medical devices -- including a drug-coated stent to prop open coronary arteries -- should ensure double-digit earnings growth through 2007.

The company’s sales in the quarter rose 17% to $5.52 billion, about $230 million higher than Wall Street had expected. The results were helped by a decline in the dollar. Weakness in the currency raises the value of overseas sales when converted back into dollars.

Revenue from prescription drugs rose 18%. Sales of injectable treatment Humira for rheumatoid arthritis soared 58% to $321 million.

For the year, Abbott expects earnings of $2.47 to $2.53 a share, in line with analysts’ estimates.