Abbott raises profit forecast on strong medical device sales

10:19 am Thursday, July 18th, 2024

By Leroy Leo and Puyaan Singh

(Reuters) -Abbott Laboratories raised its annual profit forecast on Thursday after its second-quarter earnings edged past Wall Street estimates on double-digit growth in sales of its glucose monitors and strong demand for heart devices.

The medical devices unit powered the beat while sales in its diagnostics and nutrition businesses missed estimates.

Abbott’s shares fell 2.6% to $102.21 in early trading.

The strength in medical devices “likely won’t be enough to fully shake” fears over the company’s liability in cases surrounding its infant formula just yet, J.P. Morgan analyst Robbie Marcus said in a note.

Earlier this month, the first trial against Abbott over claims that its formula for preterm infants used in neonatal intensive care units causes a potentially deadly bowel disease got underway.

Abbott has said its products for premature infants are life-saving and called the lawsuits meritless.

Medical devices sales jumped 10.2% to $4.73 billion, ahead of estimates of $4.66 billion, according to LSEG data.

Sales of devices, like those used in heart procedures, have been boosted in recent quarters as more people, especially older adults, caught up on surgeries deferred during the pandemic.

Sales of continuous glucose monitors, such as Abbott’s FreeStyle Libre and rivals from DexCom, have been lifted by increasing diabetes care awareness, wider insurance coverage and preference for devices that do not need finger pricks.

FreeStyle Libre sales jumped 18% to $1.6 billion in the second quarter. Abbott expects the device, including a recently approved over-the-counter version, to bring in sales of $10 billion by 2028.

Sales in its nutrition business, which houses its infant and adult formula products, of $2.15 billion missed expectation of $2.16 billion. Diagnostics sales such as COVID-19 tests fell 5% to $2.20 billion, compared to estimates of $2.21 billion.

On an adjusted basis, quarterly profit per share of $1.14 beat estimates of $1.10. The company expects full-year profit of $4.61 to $4.71 per share, compared with $4.55 to $4.70 previously.

(Reporting by Pratik Jain, Puyaan Singh and Leroy Leo in Bengaluru; Editing by Sriraj Kalluvila)