Abbott Labs (ABT) unveiled plans on Wednesday to split up into two separate companies by spinning off its pharmaceutical unit, becoming the latest U.S. company to break apart in an effort to unlock hidden shareholder value.

The Abbott Park, Ill.-based medical company also disclosed a 66% plunge in third-quarter net income, but slightly better-than-expected non-GAAP EPS. 

Abbott said it plans to split into two separate companies, one generating about $18 billion in annual sales and focusing on its research-based pharmaceuticals and the other bringing in $22 billion and holding its diversified medical products.

While the medical products company will retain the Abbott name, the other business will be named at a later date. The company sees the transaction being completed by the end of 2012.

"Today's news is a significant event for Abbott, and reflects another dynamic change in our company's 123-year history, strengthening our outlook for strong and sustainable growth and shareholder returns," CEO Miles White said in a statement. 

The company said White will stay on as CEO of the medical products company, while Abbott exec Richard Gonzalez will become chairman and CEO of the new company.

A number of other companies in various industries have announced similar breakup plans in recent months, including ITT (IT), Sara Lee (SLE), McGraw-Hill (MHP) and Fortune Brands (FO).

Some pharmaceutical companies have sold off specific divisions, including Mead Johnson Nutrition (MJN) and Bristol-Myers Squibb (BMY).  

Meanwhile, Abbott said it earned $303 million, or 19 cents a share, last quarter, compared with $891 million, or 57 cents a share, a year earlier. The recent results were hurt by a $1.4 billion litigation charge related to a regulatory investigation.

Excluding one-time items, it earned $1.18 a share, topping estimates by a penny. Sales jumped 13% to $9.82 billion, compared with the Street’s view of $9.64 billion.

Wall Street cheered the results and breakup plans, bidding Abbott’s stock 4.82% higher to $54.96 Wednesday morning. The company’s shares have rallied about 9% year-to-date.

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