Abbott’s 2021 Forecast Tops Analysts’ 2022 Target on Covid Tests
(Bloomberg) -- The coronavirus pandemic, responsible for profound losses around the world in 2020, has created a windfall for Abbott Laboratories.
The health-care powerhouse sold 300 million tests to detect and track the outbreak in the fourth quarter alone, the company said in a statement Wednesday. That generated $2.4 billion in sales from products that didn’t exist a year earlier.
At the same time, Abbott forecast adjusted earnings of at least $5 per share from continuing operations for 2021, leapfrogging both the $4.42 a share average estimate from analysts for this year and the $4.61 projection for 2022.
That estimate may be conservative, Chief Executive Officer Robert Ford told investors and analysts in a call. “This was a good floor, a good starting point at $5,” Ford said. “If anything, we could have significant upside here.”
Abbott shares rose 1.5% to $116.44 at 12:04 p.m. in New York trading after securing a 28% rise in the past 12 months through Tuesday.
Analysts questioned whether Ford would be able to maintain the blistering pace of growth into 2022, particularly as vaccinations against coronavirus continue and the pandemic starts to wind down. Ford said it’s too soon to tell, but he’s not worried about demand plummeting.
“It’s a little premature to just skip across all the way to 2022, but we didn’t do 2021 in isolation,” he said. “Prior to the pandemic, the consensus for 2023 earnings per share was just under $5, so we are targeting that EPS level this year.”
In essence, he added, “we have pulled forward at least two full years of EPS growth. Our mindset is going to be that we are going to maintain that pull forward indefinitely.”
While many rivals are projecting significant gains in 2021, they are doing it off of unexpected declines in 2020 when the pandemic lowered use of non-Covid medical care. Abbott posted a 13% gain in diluted earnings per share from continuing operations in 2020, with sales rising 9.8% to $34.6 billion as demand for the company’s Covid-19 tests skyrocketed.
The Abbott Park, Illinois-based company introduced nearly a dozen tests for coronavirus in 2020, making diagnostics both the company’s biggest division and its fastest growing in the quarter. For the full year, diagnostic sales still trail medical devices, at $10.8 billion versus $11.8 billion, the company said in a statement Wednesday.
Demand for the company’s rapid diagnostics rose 329%, while sales of its molecular tests increased 308% as Covid-19 ravaged the U.S.
Sales rose 28% across the company’s four divisions, fueled by diagnostics, with increases of 4.4% in nutrition products and 3.4% in established pharmaceuticals sold in emerging markets. Medical device sales were down less than 1%.
Sales fell in every category of medical devices, with the exception of diabetes, where demand for the company’s FreeStyle Libre boosted revenue by nearly 30%.
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