- Abbott Laboratories on Wednesday reported first-quarter sales of $11.9 billion, a 17.5% increase on an organic basis from a year ago, driven by heightened demand for COVID-19 tests and strength in its base business. The company beat the Wall Street consensus estimate by $900 million.
- CEO Robert Ford told investors on Wednesday's earnings call that demand for rapid tests rose significantly in the U.S. and internationally as the omicron variant spread. Global diagnostics sales in the quarter were up 35% on an organic basis with $3.3 billion in coronavirus-related testing sales, with more than 90% coming from rapid tests. Excluding COVID-19 testing, global diagnostics sales grew 12% and medical device sales increased 11.5% on an organic basis compared to last year, with double-digit growth in diabetes care, electrophysiology, heart failure and structural heart.
- Abbott's 2022 guidance now includes expected COVID-19 test-related sales of approximately $4.5 billion, which it anticipates will largely occur in the first half of the year and will update on a quarterly basis. The company in January previously provided full-year guidance that included an initial coronavirus test sales forecast of $2.5 billion. Looking ahead to 2023, Ford said on the call that as the pandemic moves into "an endemic state" testing will allow people to "live our day to day and it's more about surveillance and screening."
Ford tried to reassure investors that COVID-19 testing will continue, while noting that sales in March were evenly divided between the U.S. and international markets. The CEO emphasized that governments continue to buy coronavirus-related diagnostics with Abbott "as one of the preferred suppliers."
Abbott last month was awarded a $1 billion contract by the U.S. Army to provide rapid COVID-19 antigen tests to the federal government, as part of the Biden administration's efforts to purchase one billion at-home test kits to help meet future testing demand.
"As we go into next year, we'll have a portion of our testing business that will look more like a flu/respiratory/endemic state. I think that's going to be important as we continue to grow earnings," Ford said.
Abbott rival Quidel earlier this month said it expects first-quarter revenue in the range of $990 million to $1 billion, with CEO Doug Bryant claiming the company is "well-positioned to deliver strong performance" for the year as it targets the professional, retail and government testing markets.
Abbott's global medical devices sales grew 11.5% on an organic basis in the first quarter, aided by recovery in elective procedures. According to Ford, the company's base business will "continue to grow very strongly."
While cardiovascular device procedure volumes were negatively impacted by elevated COVID-19 cases early in 2022, Ford said Abbott "saw steady improvement in procedure trends as the [omicron] case rates came down in the second half of the quarter, which has continued into April."
In Abbott's diabetes care business, Ford noted that FreeStyle Libre sales were approximately $1 billion in the first quarter, a more than 25% increase on an organic basis, and the continuous glucose monitoring system now has about four million users globally.
Evercore ISI analysts in a Wednesday note observed that Libre sales of about $1 billion were down quarter over quarter versus historical quarterly increases but they "believe this was mostly a distributor stocking impact and should catch up in the [second half.]"
Overall, Ford acknowledged that Abbott, like other medtech companies, is dealing with a number of macroeconomic challenges including supply chain disruption, healthcare staffing shortages and inflation.
"We'd expect some of that macro environment, whether it's supply chain, etcetera, to be a little bit more persistent throughout this year," Ford said. "We are seeing more COVID test sales and that is absorbing some of these challenges."