This commonly used Latin expression, meaning “ hunger sweetens the beans,” reminds us that only through an exposure to more dire experiences, can we fully appreciate better times. And the first quarter financial results from pharmaceutical and medical device companies within the cardiovascular industry, while not groundbreaking, show improvement, which comes with welcomed sweetness.
Philips Healthcare had a strong first quarter, reporting 20 percent growth in equipment order intake—with both a sales and earnings increase. Sales increased somewhat with about an $11 million jump, which the company said was largely driven by imaging systems and clinical care systems.
Its imaging and health IT competitor GE Healthcare also saw an increase in profits of 21 percent in the 2010 first quarter, with a 6 percent uptick in equipment sales and a 4 percent increase in service sales.
Interestingly, two vendors that saw their net income drop attributed some of their losses to the impact of healthcare reform, because they also reported sales increases.
Abbott saw worldwide sales increase of 14.6 percent to the comparable first quarter of last year, but claimed “sales were reduced by approximately $60 million as a result of higher Medicaid rebates under U.S. healthcare reform." Excluding this impact, Abbott said sales would have increased 15.5 percent.
Likewise, Eli Lilly, which saw its net income drop $6 million, also said its 2010 first quarter earnings were reduced by $0.12 per share due to the impact of U.S. healthcare reform, comprised of both the approximate $60 million in higher rebates and the one-time tax charge of $85.1 million.
While the income gains aren’t jaw-dropping for the cardiovascular medical device makers and pharmaceutical companies, any gains seem incredibly promising given the past year and a half of mainly negative quarterly returns. These companies also have taken decisive steps, through layoffs and other restructuring efforts, to make themselves more manageable and profitable in this less stable market, which seem to have paid off.
Regardless of whether this economic recession has passed or satiated the residual hunger, these returns must taste quite sweet for the members of the cardiovascular industry.
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