Abbott Laboratories Inc on Wednesday reported quarterly earnings that were better than had been expected thanks to improved sales in its line of nutritional products along with profit margins that improved for other segments.

Sales of its nutritional products, the biggest lineup of products the company has, which includes infant formula Similac and adult beverages Ensure, were up 1.6% to reach $1.731 billion. That segment had seen falling sales for the past quarters.

A recall last August in Vietnam and China of brands of pediatric milk formula because of fears an ingredient that an outside provider supplied might be contaminated, shrank sales of those products by nearly $40 million during the second quarter.

However, the prior quarter had taken a hit of $75 million, with Abbott saying it has quickly recovered its share in the markets that were affected, having only recently introduced a number of new products and opening a new manufacturing plant for Similac in China.

An analyst with Edward Jones said it appeared the business was stabilizing as customers have become more comfortable with the quality of the formulas by Abbott, so better growth can be expected during the second six months of 2014.

Abbott announced earnings of $455 million equal to 30 cents a share during the quarter. That was compared to $476 million in the same period one year ago, when Abbott took some charges due to initiatives for cost savings and other expenses.

Excluding the special items, Abbott has earnings of 54 cents a share, which topped expectations on Wall Street of 51 cents.

Abbott said its increase was because of better profit margins for its vascular and diagnostics products. Global sales for the company were up 1.9% to reach $5.55 billion, which was just higher than estimates on Wall Street of $5.51 billion.

Diagnostics had the best showing during the quarter expanding by 4.8% to just over $1.19 billion, with growth in sales of more than double digits in the U.S. Sales of its medical devices was up by 1.2% to close the quarter at $1.37 billion.

In early morning trading, shares of Abbott were up 0.7%.