Abbott’s fourth quarter sales came in below expectations, as the company navigated challenges in its nutrition and diagnostics businesses. Abbott also reported less growth than expected in its medical devices segment.
The company’s revenue of $11.46 billion for the quarter fell short of analysts’ consensus of $11.8 billion, Leerink Partners analyst Mike Kratky wrote in a research note on Thursday. Abbott’s shares opened at $107.53 on Thursday, down nearly 11% from Wednesday’s closing price.
RBC Capital Markets analyst Shagun Singh wrote to clients that sales in Abbott’s nutrition, diagnostics and medical devices business all were below expectations, with the biggest shortfall in nutrition.
Abbott CEO Robert Ford told investors the nutrition segment has been dealing with surges in costs following the COVID-19 pandemic, and higher prices had suppressed demand.
In diagnostics, the company grappled with continued declines in COVID-19 test use and challenges with China’s volume-based procurement program. The company’s planned $21 billion acquisition of cancer test maker Exact Sciences is still on track for 2026, and the companies are “making great progress towards closing,” Ford said.
In medical devices, Abbott reported fourth quarter sales of $5.68 billion, a more than 12% year-over-year increase. However, the numbers still fell below analysts’ expectation of $5.7 billion, as sales of diabetes and electrophysiology devices missed their targets, Singh wrote.
Ford said Abbott sees opportunities for growth with bringing its glucose sensors to more people outside of the U.S., and with growing support for use of the devices for people with Type 2 diabetes who are not taking insulin.
“I don't consider growing a billion dollars every single year, and doing it four years in a row, to be slowing down here,” Ford said in response to analysts’ questions on the diabetes segment.
The company is also working on a sensor that incorporates both glucose and ketones.
In electrophysiology, Abbott has been one of the last companies to market with a pulsed field ablation device, used to treat heart arrhythmias. The market has become competitive as Medtronic, Boston Scientific and Johnson & Johnson have all introduced their own versions.
Abbott is starting the launch of its Volt PFA device in the U.S. this year, after receiving Food and Drug Administration approval in December, and is launching a dual-energy ablation catheter internationally after receiving Europe’s CE mark this month.
“I don't think that there is a company right now that's better positioned, in terms of the completeness of the portfolio, than what we have,” Ford said.
