Abbott Declines as Revenue Misses, Covid Testing Sales Dip

Abbott Laboratories shares fell after first-quarter revenue narrowly missed estimates and sales of Covid-19 diagnostics slipped.

Total quarterly revenue was $10.5 billion, the Abbott Park, Illinois-based company said Tuesday in a statement, missing analysts’ average projection of $10.69 billion. Covid-19 testing-related sales were $2.2 billion, down from $2.4 billion in the final quarter of 2020.

Abbott fell as much as 4.3% as of 11:20 a.m. in New York, the most intraday since November. The stock had gained 14% since the beginning of the year through Monday.

Investors are looking closely at Abbott’s diagnostics sales as vaccines roll out, and analysts have questioned whether the company will maintain its pace of growth into next year. Sales of all diagnostics doubled from a year earlier to more than $4 billion, Abbott said.

‘Off-Color Print’

The revenue results are “a rare off-color print” from Abbott, Evercore ISI analyst Vijay Kumar said in a note to clients. Still, he called the base business growth “a solid performance.”

Quarterly adjusted earnings per share were $1.32, Abbott said, beating analysts’ average estimate of $1.27 a share.

Abbott is hoping to maintain sales of Covid tests with the release of BinaxNOW for over-the-counter sale and home testing for consumers. The company is shipping the self-tests to retailers to be sold at $23.99 for a pack of two.

Abbott expects growth in its non-Covid diagnostic business to continue, and the company expects to launch new products, Chief Executive Officer Robert Ford said. Demand for Covid-19 testing will also persist into 2022, he said, and the company has a great opportunity to capitalize as consumers stock up on Covid testing kits to have in their medicine cabinets at home.

“We continue to believe that Abbott can deliver earnings upside with lower-than-anticipated Covid-19 sales,” Cowen analysts said in a note to clients.

Adjusted diluted earnings per share from continuing operations for the year will be least $5, Abbott said, reaffirming its forecast given in January. Wall Street analysts’ average projection is $5.04.

Ford had indicated last quarter that the outlook may have been conservative, calling it “a good floor, a good starting point.”

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