Abbott Laboratories posts Q3 beat, raises profit forecast

Abbott Laboratories (ABT) shares tick into positive territory in Wednesday's pre-market trading on its third quarter earnings beat driven by strong demand for the company's medical devices. Morning Brief Hosts Seana Smith and Brad Smith break down what investors need to know.

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This post was written by Naomi Buchanan.

Video Transcript

Abbott Laboratory is lifting its annual profit forecast after beating third quarter expectations.

It was boosted, actually by strong sales of its medical devices.

Here, take a look at chairs pre market.

It's a mess.

It's up by about 2/10 of a percent, though in the green we'll take that.

No doubt.

Um, there's a few amazing things to think about with a laboratories.

Of course, the amazing thing is the fact that they have to move past this backdrop of the declining sales that they're seeing related to COVID and the testing equipment there.

So that is one of the kind of near term continued headwinds that the company is gonna continue to have to battle against.

I mean, we're essentially heading into cold and flu season.

So we'll see, uh, current quarter if they have anything to offer any further, uh, to offer about that.

But ultimately here chairs just fractionally moving higher on the back of this report.

Yeah, it's up than I expected.

A quarter in nutrition offset a bit by some of that covid testing sale, exceeding expectations.

Medical devices like you mentioned there in the intro and area of strength here for the company.

Despite all that, we're not really seeing a lift here in stock.

In the stock price, it's still off just about a half of a percent, uh, abbot executives on the call, saying that China continues to be a very attractive market for us, a focus for them going forward.

So again, I think you look at this almost as a mixed report.

There was certainly a lot to be encouraged about, especially when it comes to the the medical device momentum, what we're seeing there.

The covid testing sales exceeding estimates.

But again, that software they expect a quarter in nutrition might be handicapping some of the initial optimism here this morning.

Yes, spot on, and the only other thing I'll add is we.

We could have seen a much different reaction in the stock price if they had come out and actually offered something far different on the guidance.

What they actually did offer was, we're well positioned to achieve the upper end of their initial guidance ranges for the year and have good momentum heading into next year.

So investors still kind of hanging their hat on that promise from the company.

If we had seen a midpoint or low end of the guidance range be talked about then that's where the shares might have taken a little bit more of a hit, ultimately right now just fractionally higher.

And they also authorised a share buyback programme of up to $7 billion of shares.