These 10 Corps generated Total Adjusted Earnings growth of 5% in the 2Q 2013 over the 2Q 2012.
This 5% total earnings growth in the 2Q 2013 is very misleading in real terms. Most of these 10 Biological Products and Medical Equipment & Instruments Corps make continuing heavy investments in Research and Development. US GAAP requires these R&D expenditures to be immediately charged to earnings, even though in the aggregate, these R&D expenditures reap substantial future earnings for many years, due to the related long patent lives.
In the 2Q 2013, the total R&D Expenditures of these 10 Corps were $3,418 mil, which was 51% of the $6,708 mil of Total Adjusted Earnings. The two major R&D investment spenders in the 2Q 2013 were Amgen which invested $967 mil in R&D, up 17% over the 2Q 2012; and Gilead Sciences, which invested $524 mil in R&D, up 32% over the 2Q 2012.
Especially after factoring in the impact of the key R&D investments made, these 10 Biological Products and Medical Equipment & Instruments Corps did very well in real earnings' terms in the 2Q 2013.
When I put this altogether, I have to conclude that the Affordable Care Act has been extremely beneficial economically to all of the above 10 Biological Products and Medical Equipment & Instruments Corps. And this very positive impact will continue far into the future.
Below here are the adjusted earnings of these 10 Corps for the 2Q 2013 and for the comparable 2Q 2012:
| 2Q 2013 | 2Q 2012 | |||
| Adjusted | Adjusted | |||
| Net | Net | |||
| Income | Income | |||
| From | From | |||
| Continuing | Continuing | Increase | Increase | |
| Operations | Operations | (Decrease) | (Decrease) | |
| mil $s | mil $s | Amount | % | |
| Biological Products and Medical Equipment & Instruments Corps | ||||
| Amgen | 1,444 | 1,433 | 11 | 1% |
| Medtronic | 1,124 | 1,036 | 88 | 8% |
| Gilead Sciences | 840 | 767 | 73 | 10% |
| Abbott Labs | 724 | 689 | 35 | 5% |
| Baxter | 639 | 619 | 20 | 3% |
| Biogen | 549 | 439 | 110 | 25% |
| Covidien Ltd | 427 | 443 | (16) | -4% |
| Stryker | 380 | 375 | 5 | 1% |
| Becton Dickinson | 306 | 312 | (6) | -2% |
| St Jude Medical | 275 | 276 | (1) | 0% |
| Total all 10 | 6,708 | 6,389 | 319 | 5% |
