Abbott Laboratories

Abbott Laboratories is an American multinational medical device, healthcare, and pharmaceutical company. It sells medical devices, diagnostics, branded generic medicines, and nutritional products.

Employees: 113,000

Revenue: $43.7bn for FY2022

HQ Location: Illinois, United States

What they do:

They help people by discovering new ways to make life better.
They believe they do this by continuing to build life-changing technologies that keep the heart healthy, nourish the body at every stage of life, help people to feel and move better and bring people information, medicines, and breakthroughs so that people can manage their own health.

Their vision and priorities:

To design their life-changing technologies to be accessible and affordable to everyone.

Business Projections for 2023:

Diluted EPS on a GAAP basis of $3.05 to $3.25 and full-year adjusted EPS from continuing operations of $4.30 to $4.50
Full-year 2023 organic sales growth (excluding COVID-19 testing-related sales) is projected to be high-single digits
COVID-19 testing-related sales are projected to be around $2.0 billion

Three things to know right now

NAVITOR™ TRANSCATHETER AORTIC VALVE IMPL ANTATION (TAVI) SYSTEM received FDA approval
FDA approval adds to Abbott’s comprehensive transcatheter structural heart portfolio. It offers a minimally invasive alternative to surgery for people with aortic stenosis, a common and life-threatening heart valve disease.
Abbots’s Freestyle Libre was named the best.
The Freestyle Libre was honored as the ‘best of the best’ since 1970. It has transformed the lives of approx. 4.5 million people living with diabetes globally.
ETERNA™ SPINAL CORD STIMULATION SYSTEM received FDA approval
FDA approval of the world’s smallest implantable, rechargeable spinal cord stimulation system for chronic pain. Patients can view real-time battery life and charging status updates via the mobile app for iPhone®.

Competitors

Agilent Technologies
Johnson & Johnson
Medtronic
AbbVie
Bruker Corporation

What does each business unit do?

Nutrition

This business segment offers evidence-based nutrition, research conferences, and shared initiatives to help address clinical and nutritional challenges facing today’s healthcare professionals.

Diagnostics

This business segment analyses DNA and RNA at the molecular level in order to guide treatment decisions by providing more accurate clinical tests or helping to identify highly targeted therapies that are likely to be more successful.

Established Pharmaceutical

This business segment creates breakthrough products - in diagnostics, medical devices, nutrition, and branded generic pharmaceuticals, that helps people, their family, and their community lead much healthier lives.

Medical Devices

This business segment develops life-changing technologies by changing the meaning of cardiovascular, neuromodulation, and diabetes care.

Their financial calendar

Q1: January-March - Earnings 20th April

Q2: April-June - Earnings 20th July

Q3: July-September - Earnings 19th October

Q4: September-December - Earnings 25th January

Next Earnings Report:

Around 20th April 2023

Positives from the last earnings report Q4FY22:

Established Pharmaceuticals sales increased by 1.0% on a reported basis and 7.9% on an organic basis in the fourth 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 increased by 3.9% on a reported basis and 10.3% on an organic basis, led by strong growth in several geographies including India, China, Brazil, and Mexico, and across several therapeutic areas, including cardiometabolic, women's health, and central nervous system/pain management.
Worldwide Medical Devices sales were flat on a reported basis and increased 7.4% on an organic basis in the fourth quarter. Sales growth in the U.S. was led by strong double-digit growth in Electrophysiology, Structural Heart, and Diabetes Care.
In Diabetes Care, FreeStyle Libre sales were approximately $1.1 billion in the quarter, including U.S. growth of more than 40%.

Challenges from the last earnings report Q4FY22:

Supply chains continue to face challenges, and their healthcare customers have been navigating staffing challenges that negatively impacted certain medical device procedure trends and routine diagnostic testing volumes

Fourth-quarter sales of $10.1 billion, which were negatively impacted by an expected year-over-year decline in COVID-19 testing-related sales, decreased by 12.0% which excludes the impact of foreign exchange

Fourth-quarter sales decreased by 1.4% on a reported basis (excluding COVID-19 testing-related sales)
Worldwide COVID-19 testing-related sales were $1.069 billion in the fourth quarter of 2022 compared to $2.319 billion in the fourth quarter of the prior year.
Worldwide Nutrition sales decreased 11.1% on a reported basis and 5.7 percent on an organic basis in the fourth quarter. Total worldwide Nutrition and Pediatric Nutrition sales were negatively impacted as a result of manufacturing disruptions during 2022 of certain infant formula products at Abbott's Sturgis, Michigan, facility. The manufacturing facility has subsequently restarted production.
In Adult Nutrition, global sales decreased by 6.8% on a reported basis
Diagnostics sales in the fourth quarter were negatively impacted by year-over-year declines in COVID-19 testing-related sales.
International Medical device sales were negatively impacted by intermittent COVID-19 lockdown restrictions in China as well as supply constraints in certain areas, including Electrophysiology and Diabetes Care.

Full Year Result Highlights 2022:

Full-year 2022 sales of $43.7 billion
Full-year 2022 sales growth of 1.3%; organic sales growth of 6.4%
Full-year 2022 GAAP diluted EPS of $3.91; adjusted diluted EPS of $5.34
They continue to strengthen their portfolio with a steady cadence of new product approvals

Risks to the Business:

Abbott may acquire other businesses, license rights to technologies or products, form alliances, or dispose of or spin off businesses, which could cause it to incur significant expenses and could negatively affect profitability.
Abbott depends on sophisticated information technology systems and maintains protected personal data, and a cyber-attack or other breach affecting these information technology systems or protected data could have a material adverse effect on Abbott’s results of operations.
Abbott’s research and development efforts may not succeed in developing commercially successful products and technologies, which may cause Abbott’s revenue and profitability to decline.
The manufacture of many of Abbott’s products is a highly exacting and complex process, and if Abbott or one of its suppliers encounters problems manufacturing products, Abbott’s business could suffer.
Abbott has significant indebtedness, which could adversely affect its business, including decreasing its business flexibility.
Abbott is subject to numerous governmental regulations and it can be costly to comply with these regulations and to develop compliant products and processes.
Laws and regulations affecting government benefit programs could impose new obligations on Abbott, require Abbott to change its business practices, and restrict its operations in the future.
Changes in the healthcare regulatory environment may adversely affect Abbott’s business.
The expiration or loss of intellectual property protection and licenses may affect Abbott’s future revenues and operating income.
Significant safety concerns could arise for Abbott’s products, which could have a material adverse effect on Abbott’s revenues and financial condition.
Abbott is subject to risks related to public health crises, such as widespread outbreaks of infectious diseases like the COVID-19 pandemic.
Abbott is subject to cost containment efforts that could cause a reduction in future revenues and operating income.
Competitors’ intellectual property may prevent Abbott from selling its products or have a material adverse effect on Abbott’s future profitability and financial condition.
New products and technological advances by Abbott’s competitors may negatively affect Abbott’s results of operations.
Fluctuations in foreign currency exchange rates may adversely affect Abbott’s financial statements and its ability to realize projected sales and earnings.
Deterioration in the economic condition and credit quality of certain countries may negatively affect Abbott’s results of operations.
The international nature of Abbott’s business subjects it to additional business risks that may cause its revenue and profitability to decline.