Abbott's slips 3% in pre-market trade following in line earnings report
Abbott, the global healthcare company, recently released its Q4 (Dec) 2023 earnings report, displaying earnings of $1.19 per share, in line with expectations. The company's revenues saw a moderate increase of 1.5% year-over-year, reaching $10.24 billion, slightly outpacing expectations.
In the fourth quarter, reported sales increased by 1.5%, with organic sales growth for the underlying base business rising 11.0%. The full-year 2023 reported sales experienced a decline of 8.1% due to the anticipated drop in COVID-19 testing-related sales. However, organic sales growth for the underlying base business increased by 11.6% in the same period. Full-year 2023 GAAP diluted EPS was $3.26, while adjusted diluted EPS was $4.44.
The total sales amounted to $10,241 million, with the U.S. contributing $3,949 million and International markets contributing $6,292 million. U.S. sales represent approximately 38.6% of total sales, while International sales account for approximately 61.4%.
In terms of growth, the Diagnostics category experienced the most significant increase in the U.S. with an 8.2% change compared to Q4 2022. Internationally, the Medical Devices category saw substantial growth of 18.5%.
Overall, the areas with the highest percentage change compared to Q4 2022 are International sales in Nutrition and Medical Devices, with increases of 15.3% and 17.5%, respectively. The Medical Devices category demonstrates consistent growth both in the U.S. (17.6%) and Internationally (17.5%).
The Diagnostics category experienced a notable decline of 38.8% in the U.S., while Organic growth (excluding COVID-19 tests) remains strong at 11.0% in the U.S. and 13.9% in the International market.
Abbott believes that measuring sales growth rates on an organic basis, excluding the impact of foreign exchange, the impact of exiting the pediatric nutrition business in China, and the impact of the acquisition of Cardiovascular Systems, Inc. (CSI), provides an accurate understanding of the core underlying performance of the business. Furthermore, excluding COVID-19 tests from sales growth rates is considered an appropriate way for investors to understand the underlying base business performance, as the pandemic has shifted to an endemic state, leading to a significant decline in demand for COVID-19 tests.
Abbott's R&D pipeline has continued to deliver new products consistently, driving the company's growth. The fourth quarter saw sales increase by 1.5% on a reported basis and 2.1% on an organic basis. GAAP diluted EPS was $0.91, and adjusted diluted EPS was $1.19, excluding specified items.
In 2023, Abbott managed to recapture market share in the U.S. infant formula market. The company has now regained its previous leading position, as measured on a volume basis.
Abbott issued guidance for FY24 that remains in line with expectations, forecasting EPS of $4.50-4.70. The company projects full-year 2024 organic sales growth, excluding COVID-19 testing-related sales, to be in the range of 8.0% to 10.0%.
In December, Abbott received approval from the U.S. Food and Drug Administration (FDA) for its new laboratory automation system, GLP systems Track™, to help laboratories optimize performance and safety to meet the growing demand for diagnostic testing.
In January, Abbott announced that the first-in-human procedures were conducted using its new Volt Pulsed Field Ablation (PFA) System to treat heart rhythm disorders such as atrial fibrillation (AFib). Abbott anticipates approval for its U.S. clinical trial (IDE) for the Volt PFA System in the first half of 2024.
Additionally, Tandem Diabetes Care's t:slim X2™3 insulin pump became the first automated insulin delivery system in the U.S. to integrate with Abbott's new FreeStyle Libre 2 Plus sensor in January.
This comprehensive earnings report highlights Abbott's continued performance and growth outlook as it navigates the evolving healthcare landscape.