By Tess Stynes 

Abbott Laboratories said its first-quarter earnings fell 31% as the health-care products company reported negative currency impact that masked modest overall sales growth.

Abbott has faced continuing challenges stemming from a recall last year by one of its baby-formula suppliers, Fonterra Co-Operative Group Ltd. The recall led Abbott and competitor Danone SA to take their own products off the market across Asia. The scare was prompted by a Fonterra warning that its powdered milk might contain dangerous bacteria, which ultimately turned out to be a false alarm.

In the latest quarter, Abbott's nutrition business sales fell 4% to $1.63 billion. Excluding currency fluctuations, the decline was 1.7%.

International sales, which comprise more than 70% of Abbott's total sales, dropped 2.3%. However, excluding exchange rates, they improved by 1.8%. Abbott also estimated the nutrition segment recall last year and timing of supply in its established pharmaceuticals segment related to an expected plant shutdown had a negative impact of 2.6 percentage points.

Abbott reported a profit of $375 million, or 24 cents a share, down from $544 million, or 34 cents a share, a year earlier. Excluding restructuring-related expenses, tax impacts and other items, adjusted earnings from continuing operations fell to 41 cents from 42 cents. Revenue decreased 2.5% to $5.25 billion. Excluding currency fluctuations, sales rose 0.5%.

The company expected per-share profit of 34 cents to 36 cents and a sales decline in the low single digits.

Research-and-development expenses increased 12%.

Abbott spun off its specialty pharmaceuticals business as AbbVie Inc. early last year. AbbVie plans to release its first-quarter financial results April 25.

Shares of Abbott, which affirmed its 2014 outlook, rose 1.7% to $38.62 in recent premarket trading.

Write to Tess Stynes at tess.stynes@wsj.com

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