Friday, Oct. 30 was a bad day to own a chip stock. It was a decent day to own a drugmaker. AbbVie (ABBV) said third-quarter sales rose 10% to $17.4 billion. It beat on profit. It raised its outlook for the year. And it raised its quarterly dividend. The stock closed at $294.89, up $4.10, while the Nasdaq fell about 2.9%.
A few years ago AbbVie was the company about to lose Humira. That drug was one of the best-selling medicines ever, and cheaper copies were coming. The worry was fair. The answer was Skyrizi and a line of newer drugs. This quarter, immunology sales rose 16% to $9.17 billion. Neuroscience rose 19% to $3.39 billion. Oncology grew just 0.8%, so not every door opened. Adjusted earnings were $3.82 a share against the $3.73 analysts expected, by FactSet. Reported profit was $4.22 billion, or $2.37 a share. A year ago it was $186 million, or 10 cents, because of a big research charge then. This year's charge was 11 cents a share against $1.50 a year ago.
Why the raise matters
The company now expects adjusted earnings of $13.95 to $13.99 a share for the year. The old range was $13.76 to $13.96. Wall Street was at $13.91. This is a reversal. AbbVie cut its outlook earlier in October for research costs. It cut it in July to pay for the Apogee Therapeutics deal. That deal brought a drug called zumilokibart, a possible rival to Dupixent from Regeneron (REGN) and Sanofi (SNY) for eczema. So a company that trimmed its promise twice this year just lifted it. That's the context for the dividend. The Journal's brief says the quarterly payout went up but doesn't print the new figure, so we won't guess at it.
Here's the thing about a dividend raise. Anyone can declare one. It only means something when the earnings behind it are growing too. This one comes with a sales beat, a profit beat and a higher forecast. That's the good kind. AbbVie closed Friday up 29.06% for the year, by the paper's table.
Our read
This is an Investments/Risk · IN04 story, and a health-costs one underneath. AbbVie is held at weight in 23 of our model books. Nothing added. We own it for exactly this reason. In a week when the AI corner of the market sold hard, a company that makes drugs people take every day grew 10% and paid shareholders more. That's what the staples and health slice of a portfolio is for. It isn't meant to double. It's meant to show up. The risk hasn't gone away. Drug patents end, and oncology barely grew. But a raised outlook after two cuts says management feels better about the year than it did in July. That's their call. We'll keep checking it against the numbers.
Here's the connection to your own money. If you draw income from your portfolio, open your last brokerage statement and find the dividend line. See which one or two companies pay most of it. Then check one thing about each. Find out whether its earnings grew this year or it just kept paying. A dividend raise on growing earnings is a promise with money behind it. A steady dividend on falling earnings is a promise on borrowed time. Ten minutes with one statement tells you which kind you've got. You check the umbrella while the sky is still gray, not once it's pouring. If you'd like a second pair of eyes on that list, that's what a review is for.