Abbott Laboratories (NYSE:ABT) reported robust third-quarter earnings in 2023, outperforming expectations with an adjusted earnings per share (EPS) of $1.14. The company also raised its full-year adjusted EPS guidance to a range of $4.42 to $4.46. Organic sales growth, excluding COVID testing, saw double-digit increases for the third consecutive quarter, driven by all four of its major business segments: nutrition, established pharmaceuticals, diagnostics, and medical devices.
Key takeaways from the earnings call include:
- Abbott's base business has been growing in double digits for three consecutive quarters, with the EPS contribution expected to be around $4.10 in Q4.
- The company anticipates top-line growth acceleration in 2024, based on its growth model and framework.
- China continues to be a crucial market, with no significant impact observed due to anti-corruption initiatives in Q3.
- In the diabetes segment, Abbott views GLP-1s as a positive addition and believes investor concerns are overblown.
- Abbott has obtained Type II Basel coverage in France, the US, and Japan for their CGM products, expanding reimbursed coverage opportunities.
- The company has recovered about 90% of its market share following a recall and has seen sustained growth across all segments.
- Abbott has completed three transactions in the past six months and plans to continue its M&A strategy.
- The company expects gross margin expansion in 2024 due to lower commodity costs and freight and distribution expenses.
During the earnings call, Abbott (NYSE:ABT) also discussed the potential use of data collected from their Libre platform to evaluate the effectiveness of GLP-1s in real-world settings. The company's diverse healthcare portfolio and growth in international markets, particularly in France and Japan, due to reimbursement for basal coverage, were also highlighted.
The company has seen sustained growth in market share across all segments, particularly in the WIC channel, and plans to continue its M&A strategy. In its diabetes segment, Abbott highlighted the launch of their Lingo product in the UK and their intention to file for approval in the US.
Regarding financials, Abbott expects gross margin expansion in 2024, driven by lower commodity costs, lower freight and distribution costs, cost reductions, and a favorable product mix. The company expressed confidence in its ability to deliver double-digit bottom-line EPS growth and forecasted COVID testing sales of $1.5 billion in 2023.
Overall, Abbott emphasized its broad-based growth, strong pipeline, and positive outlook for the remainder of the year and into 2024. The company is well-positioned for a strong end of the year and 2024, with dedicated teams working on cost reductions and improving product and portfolio mix. The conference call ended with an announcement that a webcast replay will be available on Abbott's Investor Relations website.
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