Abbott Labs finds $500 mil.
This article was originally published in The Gray Sheet
Executive Summary
Planned spin-off of hospital products company will free up about $500 mil. for Abbott to invest in development of remaining high-margin, high-growth businesses such as stents, spinal fusion systems and pharmaceuticals (1"The Gray Sheet" Aug. 25, 2003, p. 3). After transferring roughly $2.5 bil. in sales to the new company, Abbott will be left with a $16.8 bil. sales baseline, based on analysts' consensus 2003 revenue estimates. At that level, the 3% increase in gross margins projected by Abbott as a result of the spin-off (from the current 48% to 51%) translates into an extra $500 mil. in gross profit. Separately, Abbott notes that the beginning of its "pre-audit" is on track for year-end FDA inspections under its 1999 diagnostics consent decree...