Abbott revises 2006 EPS guidance to $2.44-$2.50 upon closing of Guidant vascular business acquisition

By Angela McDaniels

Seattle, April 21 - Abbott Laboratories expects the recently closed acquisition of Guidant Corp.'s vascular business to decrease its earnings per share to between $2.44 and $2.50 for 2006 and to between $0.56 and $0.58 for the second quarter, according to an 8-K report filed with the Securities and Exchange Commission.

The company's previous earnings-per-share guidance was $2.51 to $2.57 for 2006 and $0.59 to $0.61 for the second quarter.

These figures exclude specified items. Including the specified items and the impact of the Guidant vascular acquisition, Abbott predicted its GAAP earnings per share will be $2.39 to $2.45 for 2006 and $0.55 to $0.57 for the second quarter.

The figures are lower due to estimated earnings-per-share dilution of about $0.07 in 2006, including the impact of non-cash intangible amortization expense.

The company said it expects the Guidant transaction to be slightly accretive in 2007, improving to at least $0.15 accretion in 2009. This forecast conservatively assumes that revenue from an existing co-promotion agreement will not continue after closing. If the agreement continues, dilution in 2006 will be less than $0.07 and accretion in 2007 will be greater.

The acquisition was made in connection with Boston Scientific Corp.'s acquisition of Guidant. In addition to $4.1 billion in cash for Guidant's vascular business, Abbott will pay a $250 milestone payment to Boston Scientific upon Food and Drug Administration approval of Guidant's drug-eluting stent and a $250 million additional payment upon approval in Japan.

Abbott also provided Boston Scientific with a five-year, $900 million interest-bearing loan in connection with the acquisition and has purchased 64 million shares of Boston Scientific stock for $1.4 billion, which represents less than 5% of the company.

Abbott is a health care company based in Abbott Park, Ill., that develops pharmaceuticals and medical products, including nutritionals, devices and diagnostics.

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