Abbott Laboratories' profits jumped by more than 36% in the past quarter on heightened demand for its at-home COVID-19 test kits, the company reported Wednesday.
Abbott Labs' profits jump on high winter demand for at-home COVID-19 tests
The medtech and diagnostics company with a sizable Minnesota presence saw profits rise 36.5%, but a Similac infant formula recall dampened its outlook.
April 20, 2022 at 10:19PM
The medtech and diagnostics company reported a quarterly profit of $2.4 billion, or diluted earnings per share of $1.73, well above the $1.47 that Wall Street analysts had expected.
Abbott's $11.9 billion in revenue for the quarter, which ended March 31, rose 13.8% compared with a year ago.
COVID-19 testing sales remain a significant part of the company's current business. Pandemic-related sales tallied $3.3 billion in the first quarter — 27.7% of its total revenue.
Abbott makes the popular BinaxNOW test, which saw soaring demand early in the quarter as theomicron variant spread rapidly at holiday gatherings and child care centers. The federal government also ramped up its effort to make at-home tests free and more widely available during the period.
When excluding coronavirus -related products, worldwide sales rose 3.9% for the quarter; organic sales from existing operations jumped 7.7%.
The company's stock closed 2% higher Wednesday. Earlier in the day, investors sent the stock down, disappointed Abbott maintained its full-year guidance despite the robust first-quarter results.
"We aren't surprised to see a more conservative stance taken by management, given the nutrition recall," said J.P. Morgan analyst Robbie Marcus, referring to the Similac infant formula recall.
Abbott is working closely with the U.S. Food and Drug Administration, chief executive Robert Ford told analysts on its earnings call Wednesday morning.
The company has four core business categories: nutrition, diagnostics, pharmaceuticals and medical devices.
Abbott's diagnostics division, which includes COVID-19 tests, saw a 35.1% gain in organic sales during the quarter. Organic sales of pharmaceuticals were up 13.4%; organic sales of medical devices were up 11.5%.
The nutrition group, which includes recalled products, lost ground with a 4.4% drop in organic sales.
Within medical devices, the company saw double-digit sales gains in four of its seven categories: electrophysiology, heart failure, structural heart and diabetes. The strongest growth was in diabetes care, where organic sales were up 20.4%.
Throughout the earnings call, Abbott leaders encouraged company watchers to analyze the numbers without their circumstantial outliers, including COVID-19 testing or the impact from the infant formula recall.
When excluding those factors, Ford said, "our base business grew 11% in the quarter."
Illinois-based Abbott acquired St. Paul-based St. Jude Medical Inc. for $25 billion in 2017. The company has about 5,000 employees in Minnesota.
The company declared its 393rd consecutive dividend, a streak that began in 1924.
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