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Abbott's (ABT) Q4 Earnings and Revenues Beat Estimates

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Abbott Laboratories ABT reported fourth-quarter 2021 adjusted earnings from continuing operations of $1.32 per share, which exceeded the Zacks Consensus Estimate by 11.9%. However, the adjusted figure declined 8.9% from the prior-year quarter.

The quarter’s adjustments include certain non-recurring intangible amortization expenses and other expenses primarily associated with restructuring actions, acquisitions and other expenses.

Reported earnings from continuing operations came in at $1.11, reflecting a 7.5% decline year on year.

Full-year adjusted earnings per share (EPS) was $5.21, a 42.7% improvement from the year-ago period. This exceeded the Zacks Consensus Estimate by 2.8%.

Fourth-quarter worldwide sales of $11.47 billion were up 7.2% year over year on a reported basis. The top line exceeded the Zacks Consensus Estimate by 8.5%.On an organic basis (adjusting for the impact of foreign exchange), sales improved 7.7% year over year in the reported quarter.

For 2021, worldwide revenues were $43.08 billion, up 24.5% on a reported basis and up 22.9% organically from the year-ago period. The metric exceeded the Zacks Consensus Estimate of $42.21 billion.

Quarter in Detail

Abbott operates through four segments — Established Pharmaceuticals Division (EPD), Medical Devices, Nutrition, and Diagnostics.

In the fourth quarter, EPD sales improved 4.9% on a reported basis (up 5.8% on an organic basis) to $1.20 billion. Organic sales in key emerging markets improved 5.2% year over year. According to Abbott, organic sales improvement was backed by strong growth across several geographies, including China, Russia and India.

Medical Devices business sales improved 15.1% on a reported basis (up 15.9% on an organic basis) to $3.75 billion. Barring Neuromodulation, all other sub-segments in the quarter reported organic revenue growth.

Diabetes Care reported organic growth of 28.3% year over year led by FreeStyle Libre, which represented 36% of organic sales growth in the reported quarter. Heart Failure sales improved 27.6% organically.

Compared with the pre-pandemic figures of 2019, Medical Devices sales improved 17% on a reported basis (up 15.8% on an organic basis) in the fourth quarter.

Abbott Laboratories Price, Consensus and EPS Surprise

Abbott Laboratories Price, Consensus and EPS Surprise
Abbott Laboratories Price, Consensus and EPS Surprise

Abbott Laboratories price-consensus-eps-surprise-chart | Abbott Laboratories Quote

Nutrition sales were up 5.5% year over year on a reported basis (up 5.9% on an organic basis) to $2.04 billion. Pediatric Nutrition sales registered an improvement of 3.1% on an organic basis, banking on strong sales of oral hydration brand Pedialyte and continued share growth in the infant nutrition space.

Adult Nutrition sales improved 9% organically. According to the company, Adult Nutrition sales benefited from improved sales performance of Abbott's complete and balanced nutrition brand Ensure and diabetes nutrition brand, Glucerna.

Diagnostics sales were up 2.9% year over year on a reported basis (up 3.3% on an organic basis) to $4.47 billion. Core Laboratory Diagnostics sales were up 2.7% organically. However, Molecular Diagnostics plunged 28.4% on an organic basis. Rapid Diagnostics sales improved 9.8% on an organic basis. Point of Care Diagnostics sales rose 4.9% organically.

Excluding COVID-19 testing-related sales, worldwide diagnostics sales improved 8.7% organically in the reported quarter.

2022 Guidance

Abbott has initiated 2022 EPS guidance.

Full-year adjusted earnings from continuing operations (excluding specified items of $1.27 per share) are expected to be at least $4.70. The current Zacks Consensus Estimate is pegged at $4.71.

Our Take

Abbott posted better-than-expected earnings and revenue numbers for the fourth quarter of 2021. Overall, year-over-year improvement in revenue looks encouraging. Barring Neuromodulation (where the company reported a 7.5% year-over-year decline on an organic basis), the company registered organic sales growth across all its operating segments. COVID-19 testing-related sales were driven by demand for BinaxNOW, Panbio and ID NOW rapid testing platforms. Within the Diabetes Care business, the company has been in the limelight for developments in its flagship, sensor-based continuous glucose monitoring system, FreeStyle Libre. Within Adult Nutrition, the company gained from the strong performance of Ensure and Glucerna brands.

Zacks Rank & Key Picks

Abbott currently carries a Zacks Rank #3 (Hold).

Here are a few medical stocks worth considering as these have the right combination of elements to post an earnings beat this quarter.

AMN Healthcare Services, Inc. AMN has an Earnings ESP of +10.29% and a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

AMN Healthcare’s long-term earnings growth rate is estimated at 16.2%. AMN’s earnings yield of 5.5% compares favorably with the industry’s 0.8%.

Henry Schein, Inc. HSIC has an Earnings ESP of +2.62% and a Zacks Rank of 2.

Henry Schein’s long-term earnings growth rate is estimated at 11.8%. HSIC's earnings yield of 5.9% compares favorably with the industry’s 4.1%.

Hologic, Inc. HOLX has an Earnings ESP of +1.56% and a Zacks Rank #2.

Hologic’s long-term earnings growth rate is estimated at 7.4%. HOLX's earnings yield of 5.3% compares favorably with the industry’s 4.8%.


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