Abbott Q3 Earnings: Strength, Resiliency, Momentum

Abbott raises its full-year guidance thanks to strong growth driven by its diverse portfolio and COVID-19 tests.

Strategy and Strength | Oct. 21, 2020

Abbott significantly beat consensus expectations in the third quarter with impressive growth delivered by the company’s diversified portfolio of life-changing products and its innovations in COVID-19 testing technologies.

This growth translated to worldwide sales for the quarter of $8.9 billion, which increased 10.6% on an organic basis excluding the impact of foreign exchange (9.6% reported). Abbott also achieved double-digit adjusted earnings growth of 16.7%, which excludes specified items, versus the prior year.1

Sales were driven by Diagnostics — including massive demand for the company’s COVID-19 tests — and continued strong growth in Diabetes Care and Nutrition. This quarter also saw improvements in Abbott’s Cardiovascular and Neuromodulation businesses.

Given this momentum, Abbott is raising its full-year 2020 guidance for adjusted diluted EPS from continuing operations to at least $3.55.2

Abbott’s performance was fueled by growth across most of its key businesses.

  • Solid worldwide growth in Diagnostics, 38.8% organic (38.2% reported), was driven by demand for Abbott’s portfolio of COVID-19 diagnostics tests. In 2020, Abbott has delivered more than 100 million tests across all of its testing platforms, and continues investing to expand capacity even further.

    Among Abbott’s latest tests is the BinaxNOW COVID-19 Ag Card rapid test, which received emergency use authorization (EUA) from the U.S. Food and Drug Administration in August. The test delivers results in just 15 minutes with no instrumentation required. Abbott is selling the test for $5 and offers a complementary mobile phone app, called NAVICA, that allows people who test negative to display their result. In October, Abbott also received EUA for a new IgM antibody blood test on its ARCHITECT and Alinity platforms, which provides a more complete picture of where patients are in their recovery.
  • Growth of Abbott’s Medical Devices business was led by FreeStyle Libre, which grew 35.6% organic (37.9% reported). In the quarter, Abbott announced CE mark for its FreeStyle Libre 3 system and showed the potential of this world-leading glucose-sensing technology beyond diabetes with its Libre Sense Glucose Sport Biosensor, which is CE marked. Abbott also received CE mark for its next-gen heart device MitraClip G4.
  • Strong worldwide Nutrition sales of $1.9 billion were driven by demand for Ensure, Abbott’s market-leading complete and balanced nutrition brand, as well as U.S. growth of Pedialyte, the company’s oral rehydration brand and PediaSure, Abbott’s complete, balanced nutrition brand for children.

For full financials and reconciliation of non-GAAP measures, you can read our press release. For further information, take a look at some additional materials below:

Abbott President and CEO Robert Ford shared his views on the strength of our diversified business model:

Learn more about our contributions to fighting COVID-19.

Download a summary of Abbott's earnings highlights here.

*For important safety information on the FreeStyle Libre portfolio, please click here.

References

1Third-quarter 2020 diluted EPS from continuing operations on a GAAP basis reflects 30.2 percent growth.
2Abbott projects full-year 2020 diluted earnings per share from continuing operations under GAAP of at least $2.35. Abbott forecasts specified items for the full-year 2020 of $1.20 primarily related to intangible amortization, acquisition-related expenses, restructuring and cost reduction initiatives and other net expenses.