Abbott Laboratories shares jumped Wednesday after diversified healthcare companies provided strong first-quarter results and left revenue guidance intact. Revenue for the three months ended March 31, rose 4% to $10.36 billion, with a slightly lack of consensus of $10.4 billion, according to estimates compiled by LSEG. Organic sales, excluding Covid test results, rose 8.3%, breaking the 7.7% estimate, according to Factset. According to LSEG data, earnings per share (EPS) rose 11.2% a year to $1.09, with forecasts rising 2 cents. ABT YTD Mountain Abbott Laboratories Ytd Abbott’s earnings rally extends what was already a good year for brutal overall market shares. Abbott’s shares took part in Wednesday’s session as the second-best performing club stock, moving ahead by 11.6%. With a gain of 14.8%, only Cloud Strike has been better. Abbott has also significantly outperformed the basket of medical equipment inventory this year. Bottomline Abbott has transformed into a good quarter in a challenging tariff fuel environment. The company has breached Wall Street expectations with three key profitability metrics (earnings per share, adjusted gross profit margin, adjusted pre-tax revenue margin), while at the same time excluded Covid testing, it has better than expected. The aircraft sales growth was also realized. Topline revenue mistakes are not concerning. First of all, it was only $40 million above the consensus. Furthermore, the shortage is associated with diagnostic segments that are primarily facing out-of-control pressure. Specifically, sales of low-range Covid tests fell by $120 million from a year ago, and China’s national strategy to manage healthcare costs continued to decline in prices paid to Abbott. “We’re growing in our diagnostics business everywhere except China,” CEO Robert Ford said in a revenue call. “Outside of this quarter, we’ve grown about 7%.” Abbott is considering ways to surprise growth in other regions to offset the reality of doing business in China, Ford said. “We just have to go through this. (China) is still an important market. It still has good profitability.” Abbott Laboratories Why We Own It: Abbott is a high-quality medical technology company grown in fast clips in its industry. The stock deals with a variety of overhangs as we owned, including litigation concerns related to its specialized infant formula. The decline in sales. Also, concerns that adoption of GLP-1 will disrupt the ongoing glucose monitor business. But Abbott’s organic sales growth continues to shine. Competitors: DEXCOM, BOSTON SCIENTIFIC AND EDWARDS LIFESCIENCES Latest Purchases: Starting May 29, 2024: On January 29, 2024, the quarterly Cherry was when Abbott reaffirmed its revenue guidance of between $5.05 and $5.25 per share, despite a photo of Tarif, which is quite different from late January. Abbott estimates this year’s “hundred millions of dollars” tariffs have been a hit, and the impact is actually beginning to feel in the third quarter, Ford said. The company is considering all sorts of mitigation plans, Ford said, but said it hasn’t sacrificed its investment in future growth, including lower R&D spending. For example, a weak US dollar can help Abbott, which generates about two-thirds of overseas revenue. With 90 manufacturing sites around the world, Abbott also has the ability to “significantly” mitigate the impact of tariffs over the long term. “Before the entire tariffs… I was even thinking about raising EPS guidance given the momentum we’re looking at in the basic business,” Ford said. “But since the tariffs are here, I felt that our guidance would be reaffirmed that it was already a rather strong statement,” we agree. That’s why we’re repeating our price target of $145 per share. There are no small feats in a market where PT is reduced left and right. We know that Abbott’s tariff exposure is small and there are other drivers that offset those headwinds. Abbott could be stock to buy if he saw another day when the tariff headlines sprint through the stock market. The chart above shows Abbott’s quarterly quality. The diagnosis was one of the only sales segments of Abbott’s four reported segments, but as has been discussed, it is not a significant concern. Nutrition is home to brands that have guaranteed protein powders and pediatric beverages for children, raising expectations, and Ford said the company is making progress by regaining market share a few quarters ago. Established drug sales – the generic drug business, which is only operated internationally – is better than expected. Medical devices (its largest and most important segment) have led to strong growth year-on-year growth, increasing by 9.9% on a reported basis and 12.6% organically, excluding headwinds in foreign exchange. In the fast-growing diabetes portfolio, continuous glucose monitors, or CGM sales totaled $1.7 billion in the first quarter, up over 20% in 2024 and over 30% in the US. I was thinking about revenue guidance for the year. As far as tariffs go, Ford also said Abbott has two U.S. Libre manufacturing sites to serve customers in the home market. Another important product from Abbott is its bolt PFA system. This ensured pre-expected approval from European regulators in March. Used to treat abnormal cardiac rhythms, Volt helps Abbott compete in the market for pulse-field ablation (PFA) devices with others like Boston Scientific and Medtronic. Legacy methods for treating conditions such as atrial fibrillation used extreme heat (radio-frequency ablation) or cold (frozen ablation). In contrast, PFA devices use electrical pulses to destroy cells that cause abnormal cardiac rhythms. This is an approach that is billed as safer and faster than traditional treatment options. Abbott is expected to file Volt approval later this year, with clearance likely to occur in early 2026. “Obviously, we’re starting with a development that focuses a bit on the users that were part of the clinical trials, and as we get into the second half of the year, we’ll start to increase that,” he added, “I think this product is really trying to do well. I think it’s going to do what we’re trying to do.” Abbott’s efforts to throw away the litigation overhang from stocks suffered from set-off in the first quarter, but we believe our beliefs will be temporary. In mid-March, a Missouri judge ordered a retry in the November victory case between Abbott and his rival Reckett, defeating allegations that the specialist formula for premature babies caused necrotizing enteritis, or severe bowel disease known as NEC. Abbott said he would appeal a re-authorized ruling based on alleged misconduct by his lawyer against the defendant during the initial proceedings. Executives didn’t really discuss the NEC procedure for Call, except that it would not affect the way it evaluates the entire business. Main takeaway here: Abbott’s NEC lawsuit has not disappeared, but we continue to believe that the risk is much easier to manage than previously estimated. (Jim Cramer’s Charitable Trust has been around for a long time. See here for a full list of stocks.) 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Abbott Chairman and CEO Robert B. Ford will give a keynote speech at CES 2022 in Venetian Las Vegas, Nevada, on January 6th, 2022.
Ethan Miller | Getty Images
Stocks Abbott Institute It jumped Wednesday after diversified healthcare companies provided strong first-quarter results and left revenue guidance intact.
