On October 18, 2023 Abbott (NYSE: ABT) reported financial results for the third quarter ended Sept. 30, 2023 (Press release, Abbott, OCT 18, 2023, View Source [SID1234636100]).
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Third-quarter GAAP diluted EPS of $0.82 and adjusted diluted EPS of $1.14, which excludes specified items.
Abbott narrowed its full-year 2023 EPS guidance range. Abbott projects full-year diluted EPS on a GAAP basis of $3.14 to $3.18 and projects adjusted diluted EPS of $4.42 to $4.46, which represents an increase at the midpoint of the guidance range.
Abbott continues to project full-year 2023 organic sales growth, excluding COVID-19 testing-related sales1, to be in the low double-digits2.
In July, Abbott obtained CE Mark for its AVEIR single-chamber leadless pacemaker for treating patients with slow heart rhythms. Unlike traditional pacemakers, leadless pacemakers do not require an incision in the chest to implant or leads (wires) to deliver therapy.
In September, Abbott acquired Bigfoot Biomedical, a leader in developing insulin management systems, furthering Abbott’s efforts to develop connected solutions for making diabetes management even more personal and precise.
In September, Abbott expanded its existing collaboration with global biotech leader mAbxience Holdings S.L. to commercialize several biosimilar molecules, with the goal of broadening access to these therapies for people in emerging markets.
In September, Abbott published an analysis showing a complementary relationship between the company’s FreeStyle Libre continuous glucose monitoring system and GLP-1 medications. The analysis also showed that a growing number of people are using these tools together to support behavior change to optimize the treatment of diabetes and improve overall health.
"The investments we made during the pandemic continue to drive broad-based growth across our underlying base business," said Robert B. Ford, chairman and chief executive officer, Abbott. "We’re on track to deliver on the financial commitments we set at the beginning of the year, and the momentum we’re building across the portfolio positions us well as we head into 2024."
THIRD-QUARTER BUSINESS OVERVIEW
Management believes that measuring sales growth rates on an organic basis, which excludes 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), is an appropriate way for investors to best understand the core underlying performance of the business. Management further believes that measuring sales growth rates on an organic basis excluding COVID-19 tests is an appropriate way for investors to best understand underlying base business performance as the COVID-19 pandemic has shifted to an endemic state, resulting in significantly lower demand for COVID-19 tests.
Note: In order to compute results excluding the impact of exchange rates, current year U.S. dollar sales are multiplied or divided, as appropriate, by the current year average foreign exchange rates and then those amounts are multiplied or divided, as appropriate, by the prior year average foreign exchange rates.
Third Quarter 2023 Results (3Q23)
Sales 3Q23 ($ in millions)
Total Company
Nutrition
Diagnostics
Established
Pharmaceuticals
Medical Devices
U.S.
3,817
860
1,013
—
1,940
International
6,326
1,213
1,436
1,368
2,309
Total reported
10,143
2,073
2,449
1,368
4,249
% Change vs. 3Q22
U.S.
(6.8)
25.4
(40.8)
n/a
14.6
International
0.2
9.3
(25.6)
3.2
18.4
Total reported
(2.6)
15.5
(32.7)
3.2
16.6
Impact of foreign exchange
(1.4)
(1.4)
(0.8)
(7.9)
0.6
Impact of CSI acquisition
0.5
—
—
—
1.3
Impact of business exit
(0.2)
(1.2)
—
—
—
Organic
(1.5)
18.1
(31.9)
11.1
14.7
Impact of COVID-19 testing sales (3)
(15.3)
—
(42.0)
—
—
Organic (excluding COVID-19 tests)
13.8
18.1
10.1
11.1
14.7
U.S.
15.3
25.4
13.7
n/a
11.8
International
13.0
13.4
8.2
11.1
17.1
First Nine Months 2023 Results (9M23)
Sales 9M23 ($ in millions)
Total Company
Nutrition
Diagnostics
Established
Pharmaceuticals
Medical Devices
U.S.
11,503
2,553
3,309
—
5,631
International
18,365
3,563
4,145
3,844
6,813
Total reported
29,868
6,116
7,454
3,844
12,444
% Change vs. 9M22
U.S.
(17.4)
20.2
(51.8)
n/a
14.3
International
(6.5)
1.3
(34.5)
4.0
11.8
Total reported
(11.0)
8.4
(43.5)
4.0
12.9
Impact of foreign exchange
(2.4)
(2.8)
(1.4)
(7.6)
(1.7)
Impact of CSI acquisition
0.3
—
—
—
0.8
Impact of business exit
(0.2)
(1.5)
—
—
—
Organic
(8.7)
12.7
(42.1)
11.6
13.8
Impact of COVID-19 testing sales (3)
(20.5)
—
(49.3)
—
—
Organic (excluding COVID-19 tests)
11.8
12.7
7.2
11.6
13.8
U.S.
12.9
20.2
6.3
n/a
12.6
International
11.2
8.0
7.7
11.6
14.8
Refer to table titled "Non-GAAP Revenue Reconciliation" for a reconciliation of adjusted historical revenue to reported revenue.
Nutrition
Third Quarter 2023 Results (3Q23)
Sales 3Q23 ($ in millions)
Total
Pediatric
Adult
U.S.
860
506
354
International
1,213
495
718
Total reported
2,073
1,001
1,072
% Change vs. 3Q22
U.S.
25.4
41.8
7.7
International
9.3
5.1
12.4
Total reported
15.5
20.9
10.8
Impact of foreign exchange
(1.4)
(1.4)
(1.6)
Impact of business exit
(1.2)
(2.6)
—
Organic
18.1
24.9
12.4
U.S.
25.4
41.8
7.7
International
13.4
11.5
14.8
Worldwide Nutrition sales increased 15.5 percent on a reported basis and 18.1 percent on an organic basis in the third quarter. Refer to table titled "Non-GAAP Revenue Reconciliation" for a reconciliation of adjusted historical revenue to reported revenue.
In Pediatric Nutrition, global sales increased 20.9 percent on a reported basis and 24.9 percent on an organic basis. In the U.S., sales growth of 41.8 percent was primarily driven by continued market share recovery in the infant formula business following a voluntary recall of certain products last year.
In Adult Nutrition, global sales increased 10.8 percent on a reported basis and 12.4 percent on an organic basis, which was led by strong global growth of Ensure, Abbott’s market-leading complete and balanced nutrition brand.
First Nine Months 2023 Results (9M23)
Sales 9M23 ($ in millions)
Total
Pediatric
Adult
U.S.
2,553
1,472
1,081
International
3,563
1,477
2,086
Total reported
6,116
2,949
3,167
% Change vs. 9M22
U.S.
20.2
32.8
6.4
International
1.3
(0.9)
2.9
Total reported
8.4
13.5
4.1
Impact of foreign exchange
(2.8)
(2.1)
(3.3)
Impact of business exit
(1.5)
(3.5)
—
Organic
12.7
19.1
7.4
U.S.
20.2
32.8
6.4
International
8.0
8.1
7.9
Diagnostics
Third Quarter 2023 Results (3Q23)
Sales 3Q23 ($ in millions)
Total
Core Laboratory
Molecular
Point of Care
Rapid
Diagnostics *
U.S.
1,013
317
38
97
561
International
1,436
997
95
43
301
Total reported
2,449
1,314
133
140
862
% Change vs. 3Q22
U.S.
(40.8)
12.7
(42.0)
5.7
(55.9)
International
(25.6)
6.3
(19.9)
21.8
(64.1)
Total reported
(32.7)
7.8
(27.8)
10.2
(59.2)
Impact of foreign exchange
(0.8)
(1.9)
(0.3)
0.4
(0.3)
Organic
(31.9)
9.7
(27.5)
9.8
(58.9)
Impact of COVID-19 testing sales (3)
(42.0)
(0.7)
(23.9)
—
(72.0)
Organic (excluding COVID-19 tests)
10.1
10.4
(3.6)
9.8
13.1
U.S.
13.7
13.4
(15.9)
5.7
20.1
International
8.2
9.5
1.7
20.4
2.9
As expected, Diagnostics sales growth in the third quarter was negatively impacted by year-over-year declines in COVID-19 testing-related sales3. Worldwide COVID-19 testing sales were $305 million in the third quarter of 2023 compared to $1.671 billion in the third quarter of the prior year.
Excluding COVID-19 testing-related sales, global Diagnostics sales increased 8.8 percent on a reported basis and 10.1 percent on an organic basis.
First Nine Months 2023 Results (9M23)
Sales 9M23 ($ in millions)
Total
Core Laboratory
Molecular
Point of Care
Rapid
Diagnostics *
U.S.
3,309
917
128
289
1,975
International
4,145
2,872
293
127
853
Total reported
7,454
3,789
421
416
2,828
% Change vs. 9M22
U.S.
(51.8)
9.7
(58.7)
1.9
(63.7)
International
(34.5)
3.0
(42.2)
14.6
(70.8)
Total reported
(43.5)
4.6
(48.4)
5.5
(66.2)
Impact of foreign exchange
(1.4)
(3.5)
(0.9)
(0.4)
(0.6)
Organic
(42.1)
8.1
(47.5)
5.9
(65.6)
Impact of COVID-19 testing sales (3)
(49.3)
(1.1)
(36.2)
—
(73.8)
Organic (excluding COVID-19 tests)
7.2
9.2
(11.3)
5.9
8.2
U.S.
6.3
10.6
(19.5)
1.9
7.7
International
7.7
8.8
(7.7)
16.0
9.0
*The Acelis Connected Health business was internally transferred from Rapid Diagnostics to Heart Failure on January 1, 2023. As a result, $30 million of sales in the third quarter of 2022 and $87 million in the first nine months of 2022 were moved from Rapid Diagnostics to Heart Failure.
Established Pharmaceuticals
Third Quarter 2023 Results (3Q23)
Sales 3Q23 ($ in millions)
Total
Key Emerging
Markets
Other
U.S.
—
—
—
International
1,368
987
381
Total reported
1,368
987
381
% Change vs. 3Q22
U.S.
n/a
n/a
n/a
International
3.2
(1.4)
17.2
Total reported
3.2
(1.4)
17.2
Impact of foreign exchange
(7.9)
(10.2)
(1.2)
Organic
11.1
8.8
18.4
U.S.
n/a
n/a
n/a
International
11.1
8.8
18.4
Established Pharmaceuticals sales increased 3.2 percent on a reported basis and 11.1 percent on an organic basis in the third quarter.
Key Emerging Markets include several emerging countries that represent the most attractive long-term growth opportunities for Abbott’s branded generics product portfolio. Sales in these geographies decreased 1.4 percent on a reported basis and increased 8.8 percent on an organic basis, led by growth in several geographies and therapeutic areas, including cardiometabolic, women’s health, and central nervous system/pain management.
First Nine Months 2023 Results (9M23)
Sales 9M23 ($ in millions)
Total
Key Emerging
Markets
Other
U.S.
—
—
—
International
3,844
2,889
955
Total reported
3,844
2,889
955
% Change vs. 9M22
U.S.
n/a
n/a
n/a
International
4.0
1.3
13.2
Total reported
4.0
1.3
13.2
Impact of foreign exchange
(7.6)
(8.7)
(3.9)
Organic
11.6
10.0
17.1
U.S.
n/a
n/a
n/a
International
11.6
10.0
17.1
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Medical Devices
Third Quarter 2023 Results (3Q23)
Sales 3Q23 ($ in millions)
Total
Rhythm
Management
Electro-
physiology
Heart
Failure *
Vascular
Structural
Heart
Neuro-
modulation
Diabetes
Care
U.S.
1,940
271
246
217
251
223
188
544
International
2,309
292
298
67
421
264
39
928
Total reported
4,249
563
544
284
672
487
227
1,472
% Change vs. 3Q22
U.S.
14.6
3.7
9.1
5.0
17.5
7.6
20.9
28.5
International
18.4
8.2
22.5
30.9
7.3
23.8
7.4
24.8
Total reported
16.6
6.0
16.0
10.2
10.9
15.8
18.3
26.2
Impact of foreign exchange
0.6
0.2
(0.8)
1.0
0.2
1.1
(0.5)
1.7
Impact of CSI acquisition
1.3
—
—
—
7.9
—
—
—
Organic
14.7
5.8
16.8
9.2
2.8
14.7
18.8
24.5
U.S.
11.8
3.7
9.1
5.0
(4.1)
7.6
20.9
28.5
International
17.1
7.8
24.0
26.3
6.5
21.6
9.9
22.3
Worldwide Medical Devices sales increased 16.6 percent on a reported basis and 14.7 percent on an organic basis in the third quarter. Sales growth was led by double-digit organic growth in Diabetes Care, Electrophysiology, Structural Heart, and Neuromodulation. Several recently launched products and new indications contributed to the strong performance, including Amplatzer Amulet, Navitor, TriClip, and AVEIR.
In Electrophysiology, internationally, sales grew more than 20 percent on a reported and organic basis, which includes mid-teens growth in Europe.
In Diabetes Care, FreeStyle Libre sales were $1.4 billion, which represents sales growth of 30.5 percent on a reported basis and 28.5 percent on an organic basis.
View News Release Full Screen
First Nine Months 2023 Results (9M23)
Sales 9M23 ($ in millions)
Total
Rhythm
Management
Electro-
physiology
Heart
Failure *
Vascular
Structural
Heart
Neuro-
modulation
Diabetes
Care
U.S.
5,631
800
729
661
733
652
528
1,528
International
6,813
873
873
199
1,271
794
122
2,681
Total reported
12,444
1,673
1,602
860
2,004
1,446
650
4,209
% Change vs. 9M22
U.S.
14.3
3.4
9.3
8.3
12.7
7.9
15.8
31.1
International
11.8
5.1
13.0
19.2
3.5
19.1
8.5
15.6
Total reported
12.9
4.3
11.3
10.7
6.7
13.8
14.4
20.8
Impact of foreign exchange
(1.7)
(1.7)
(2.8)
(0.2)
(2.1)
(1.5)
(1.1)
(1.5)
Impact of CSI acquisition
0.8
—
—
—
4.9
—
—
—
Organic
13.8
6.0
14.1
10.9
3.9
15.3
15.5
22.3
U.S.
12.6
3.4
9.3
8.3
(0.5)
7.9
15.8
31.1
International
14.8
8.6
18.3
20.1
6.2
21.9
14.1
17.9
*The Acelis Connected Health business was internally transferred from Rapid Diagnostics to Heart Failure on January 1, 2023. As a result, $30 million of sales in the third quarter of 2022 and $87 million in the first nine months of 2022 were moved from Rapid Diagnostics to Heart Failure.
ABBOTT’S EARNINGS-PER-SHARE GUIDANCE
Abbott projects full-year 2023 diluted earnings per share under GAAP of $3.14 to $3.18. Abbott forecasts specified items for the full-year 2023 of $1.28 per share primarily related to intangible amortization, costs associated with acquisitions, restructuring and cost reduction initiatives and other net expenses. Excluding specified items, projected adjusted diluted earnings per share would be $4.42 to $4.46 for the full-year 2023.
ABBOTT DECLARES 399TH CONSECUTIVE QUARTERLY DIVIDEND
On Sept. 21, 2023, the board of directors of Abbott declared the company’s quarterly dividend of $0.51 per share. Abbott’s cash dividend is payable Nov. 15, 2023, to shareholders of record at the close of business on Oct. 13, 2023.
Abbott has increased its dividend payout for 51 consecutive years and is a member of the S&P 500 Dividend Aristocrats Index, which tracks companies that have annually increased their dividend for at least 25 consecutive years.