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Yesterday, pharmaceutical and nutrition giant Abbott Laboratories (ABT) reported second quarter earnings. The company's earnings per share came in ahead of forecast, thanks to strong emerging market and international growth. The company earlier announced two acquisitions throughout the week that will help grow business units and boost weakened domestic sales.

In the second quarter, Abbot Laboratories saw earnings per share of $0.46. This came in slightly above analysts' forecasted $0.44. Total revenue of $5.45 came shy of analysts' estimate of $5.52 billion. Excluding foreign exchange rates, total revenue increased 4.2%. The company saw strong growth in both nutrition (+8.4%) and diagnostic (+7.6%).

In the second quarter, emerging market sales grew to $2.3 billion, an increase of 13.4%. International sales in the nutrition segment grew 18.4%, thanks to the launch of Abbott products in several new regions.

Here is a look at financials:

United States

International

Total Sales

Nutrition

$0.71 billion

$0.99 billion

$1.70 billion

Diagnostics

$0.30 billion

$0.83 billion

$1.14 billion

Established Pharm.

$0

$0.84 billion

$0.84 billion

Medical Devices

$0.52 billion

$0.84 billion

$1.36 billion

Total Sales

$1.56 billion

$3.89 billion

$5.45 billion

The company's largest business segment (nutrition) saw declines of 3.1% in the United States. Internationally, the unit was another story with sales increasing 18.4%. The international segment of nutrition posted almost $1 billion in sales and represents the future of Abbott.

Despite worries of pricing in China, Similac and Pediasure continue to be leaders around the world in the infant formula market. Abbott Laboratories is number one in the United States market and is on its way to the number one share in many other regions.

Other highlights from the quarter include:

· Launched 24 new products in Nutrition segment.

· Received FDA approval for first Hepatitis C genotyping test.

· Approval and launch of TECNIS Pierce Intraocular Lens for cataract patients.

· Announced 358th quarterly dividend, $0.14.

· New $3 billion share repurchase program.

Two acquisitions were announced this week by Abbott Laboratories. Both were stated as having no immediate impact on fiscal 2013 earnings per share. However, going forward, I think both will power growth in the United States and international markets.

Abbott announced its acquisition of IDEV Technologies for $310 million. The privately held company is a medical device company used by radiologists, vascular surgeons, and cardiologists. The company has a self expanding stent system that treats blockages related to peripheral artery disease. The product, which is approved in Europe, helps to prevent re-blockages successfully. In the United States, the product is only cleared for the treatment of biliary structures related to cancer. In the United States, the device is pending the approval from the FDA for the treatment of superficial femoral artery. Obviously, Abbott sees the potential sales from new uses for the device, pending United States approval.

Over 1500 patients were studied in trials. The company believes there are 27 million people in North America and Europe who suffer from peripheral artery disease, who could benefit from IDEV Technologies devices.

Abbott's other acquisition was OptiMedica, a privately-held company focusing on ophthalmic devices. Abbott paid $250 million upfront, with the possibility of $150 million in additional milestones. The company has a precision laser system that allows surgeons to replace some manual steps in cataract surgery. As a very complex surgery, doctors use the devices for better precision and accuracy. The devices are approved in Europe and North America.

Abbott has a line of monofocal, multifocal and toric intraocular lenses. Cataract sales made up 60% of Abbott's vision care segment. In the second quarter, the company's medical optics unit had sales of $97 million in the United States and $183 million in international markets. Total sales of $280 million actually dropped from last year, with a 0.8% drop in the United States and 1.4% drop in international sales. OptiMedica also has a 3D laser device, which was recently given a patent for its technology.

This was a huge acquisition for Abbott Laboratories. In 2013, 22 million cataract surgeries are expected to be performed around the world. With the technology of OptiMedica, combined with Abbott's existing products, the company will be a leader in vision for an aging population. Cataract surgeries are performed on people generally aged 65 to 70. I expect this acquisition to boost the medical devices segment going forward and having a material impact on earnings per share in 2014. I look forward to hearing more about this integration on future earnings calls. This is a deal that will payoff for Abbott Laboratories.

For fiscal 2013, Abbot Laboratories re-confirmed guidance of $1.98 to $2.04 in earnings per share. Analysts on Yahoo Finance are forecasting full-year earnings of $2.01. Analysts see full-year revenue of $22.4 billion. In fiscal 2014, analysts expect earnings to increase to $2.24 on revenue of $23.7 billion.

Year-to-date, shares of Abbott Laboratories are up 11.8%. Shares still trade down from their adjusted 52-week high of $38.77. I think with the spin-off of AbbVie (ABBV) and a much narrower focus on Nutrition and Vision products, Abbott Laboratories is set for strong growth ahead. This is a great play on population growth (infant formula), aging population (medical devices, vision products), and international pharmaceutical growth.

Source: Abbott Laboratories: Shares Undervalued With Acquisitions And Emerging Market Growth