New York, NYMead Johnson Nutrition Co., maker of Enfamil baby formula, saw its outlook for 2010 improve in the wake of the
recall of Similac, a competing product manufactured by Abbott Laboratories.
Reuters reports that shares of Mead Johnson rose by 2.4 percent after Abbott Laboratories recalled some Similac powdered formulas. Mead Johnson's sales rose by almost 16 percent, reaching a total of $810.2 million. This total far surpasses estimates for sales revenue by economic analysts, who projected earnings of $775.5 million.
"It is difficult for us at this point to estimate precisely how it will play out going forward," Mead Johnson CEO Stephen Golsby told the source, citing Abbott's success in convincing consumers to use its other products not subjected to the recall.
The recall of Similac was initiated voluntarily by Abbott Laboratories after the discovery of the possibility that some powdered infant formula might be contaminated with beetles.
The FDA reported in a release on the recall that the potential presence of insect parts in the formula posed no health risks to infants, but irritation of the gastrointestinal tract by the insects could cause discomfort and discourage babies from eating.
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