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Acquisition · Diagnostics · Earnings Outlook · Flu Season
Abbott Laboratories significantly cut its full-year adjusted earnings outlook to a range of $5.38-$5.58 per share from the prior $5.55-$5.80, primarily attributing the revision to a weaker-than-expected flu season impacting diagnostic sales and a 20-cent per share headwind from the earlier-than-anticipated acquisition of Exact Sciences.
Abbott's first-quarter profit declined to $1.08 billion, or 61 cents per share, from $1.33 billion, or 76 cents per share, a year earlier. Despite this, adjusted earnings of $1.15 per share slightly surpassed analyst forecasts of $1.14 per share, according to FactSet.
Total sales increased 7.8% to $11.16 billion, exceeding Wall Street models of $11 billion. Sales of rapid- and molecular-diagnostic tests fell 7.4% due to the mild respiratory season, although the broader diagnostics unit still achieved 6.1% growth.
Medical-device sales rose 13% to $5.54 billion, and established pharmaceuticals climbed 13% to $1.43 billion. These gains were partially offset by a 6% decline in nutrition sales to $2.02 billion, attributed to lower volumes following previous price increases, a strategy CEO Robert Ford states is now being reversed with positive early results.
Shares of Abbott were down 4.2% to $97.25, marking their lowest close in over two years and a 25% loss over the past 52 weeks. CEO Robert Ford confirmed the Exact Sciences acquisition will accelerate Abbott's long-term sales growth, projecting an additional $3 billion in sales this year, and expressed optimism for potential recovery in diagnostic sales with a more aggressive upcoming respiratory season.
