Strong demand for medical devices lifts Abbott's (ABT.US) full-year profit guidance
Abbott Laboratories (ABT.US) reported its third-quarter results, narrowing its full-year profit outlook, as strong demand for medical devices, especially those used by diabetics, continued to drive growth.
The company reported Q3 sales of $10.64 billion, up about 5% year-on-year, topping analysts' expectations of $10.55 billion. The medical technology segment's sales were $4.7 billion, up about 12% year-on-year, driven by double-digit growth in its diabetes care and heart departments.
Sales of diabetes devices were over $1.6 billion, up 19% year-on-year. Double-digit sales growth of products related to catheters and cardiac mapping drove a 12% year-on-year growth in electrophysiology.
Meanwhile, Abbott's pharmaceutical segment saw a $1.4 billion increase in sales, up about 3% year-on-year, as the company saw a 1% year-on-year growth in sales in some key emerging markets.
However, Abbott's diagnostics segment continued to shrink, with sales of $2.4 billion, down about 2% year-on-year, as global COVID-19 testing sales were down about 13% year-on-year. The nutrition business achieved $2.1 billion in sales, flat year-on-year.
Abbott's diluted EPS grew about 15% year-on-year to $0.94, while adjusted EPS grew about 6% year-on-year to $1.21, with gross margin rising from about 50% in the year-ago quarter to about 51%.
The company expects full-year adjusted EPS to be between $4.64 and $4.70, compared with its previous expectation of $4.61 to $4.71, with the organic sales growth guidance range maintained at 9.5%-10.0%. It expects adjusted EPS in the fourth quarter to be between $1.31 and $1.37, topping analysts' expectations of $1.34.
Robert Ford, Abbott's CEO, said: "We are positioned to hit the top end of our initial guidance for the year and to keep the momentum going into next year."
The company also announced a new share buyback program with a value of up to $7 billion.
Following the earnings release, the company's stock initially rose but then fell about 1%. As of Tuesday's close, the stock has risen 5.4% this year.
Abbott's device sales have been a highlight as the company has been dealing with lawsuits related to its infant formula products.
In July, a jury ordered the company to pay nearly $500 million after it was accused of hiding the risk of necrotizing enterocolitis (NEC) from premature babies caused by its formula. Abbott, however, denied any link between its products and the disease.