On July 20, 2023 Abbott (NYSE: ABT) reported financial results for the second quarter ended June 30, 2023 (Press release, Abbott, JUL 20, 2023, View Source [SID1234633329]).
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Second-quarter GAAP diluted EPS of $0.78 and adjusted diluted EPS of $1.08, which excludes specified items.
Projected full-year 2023 diluted EPS on a GAAP basis of $3.02 to $3.22.
Projected full-year adjusted EPS of $4.30 to $4.50 remains unchanged but reflects an increased outlook for the underlying base business offset by a lower forecasted earnings contribution from COVID-19 testing-related sales.
Abbott now projects full-year 2023 organic sales growth, excluding COVID-19 testing-related sales1, to be in the low double-digits2 and COVID-19 testing-related sales of approximately $1.3 billion.
In May, Abbott received U.S. Food and Drug Administration (FDA) approval of its TactiFlex Ablation Catheter, Sensor Enabled, the world’s first ablation catheter with a unique flexible electrode tip and contact force sensing technology to treat patients with atrial fibrillation (AFib).
In June, Abbott announced its FreeStyle Libre 2 system is the first and only continuous glucose monitoring (CGM) system to receive expanded national reimbursement in France to now include all people with diabetes who use insulin.
In June, Abbott received U.S. FDA approval of its AVEIR dual chamber (DR) leadless pacemaker system, the world’s first dual chamber leadless pacing system that treats people with abnormal heart rhythms.
"We’re achieving strong growth in our underlying base business," said Robert B. Ford, chairman and chief executive officer, Abbott. "We expect our highly productive pipeline to sustain the momentum we’re building this year and position us well for growth in the future."
SECOND-QUARTER BUSINESS OVERVIEW
Management believes that measuring sales growth rates on an organic basis, which excludes the impact of foreign exchange, the impact of exiting the pediatric nutrition business in China, and the impact of the acquisition of Cardiovascular Systems, Inc. (CSI) is an appropriate way for investors to best understand the core underlying performance of the business. Management further believes that measuring sales growth rates on an organic basis excluding COVID-19 tests is an appropriate way for investors to best understand underlying base business performance as the COVID-19 pandemic has shifted to an endemic state, resulting in significantly lower demand for COVID-19 tests.
Note: In order to compute results excluding the impact of exchange rates, current year U.S. dollar sales are multiplied or divided, as appropriate, by the current year average foreign exchange rates and then those amounts are multiplied or divided, as appropriate, by the prior year average foreign exchange rates.
Second Quarter 2023 Results (2Q23)
Sales 2Q23 ($ in millions)
Total Company
Nutrition
Diagnostics
Established
Pharmaceuticals
Medical Devices
U.S.
3,758
881
961
—
1,913
International
6,220
1,195
1,356
1,287
2,382
Total reported
9,978
2,076
2,317
1,287
4,295
% Change vs. 2Q22
U.S.
(23.2)
15.7
(60.7)
n/a
13.3
International
(2.3)
0.3
(26.8)
5.2
13.6
Total reported
(11.4)
6.3
(46.0)
5.2
13.5
Impact of foreign exchange
(2.5)
(3.0)
(1.3)
(7.4)
(1.9)
Impact of CSI acquisition
0.4
—
—
—
1.2
Impact of business exit
(0.1)
(0.6)
—
—
—
Organic
(9.2)
9.9
(44.7)
12.6
14.2
Impact of COVID-19 testing sales (3)
(20.7)
—
(51.8)
—
—
Organic (excluding COVID-19 tests)
11.5
9.9
7.1
12.6
14.2
U.S.
10.9
15.7
5.2
n/a
11.0
International
11.9
6.1
8.2
12.6
16.8
First Half 2023 Results (1H23)
Sales 1H23 ($ in millions)
Total Company
Nutrition
Diagnostics
Established
Pharmaceuticals
Medical Devices
U.S.
7,686
1,693
2,296
—
3,691
International
12,039
2,350
2,709
2,476
4,504
Total reported
19,725
4,043
5,005
2,476
8,195
% Change vs. 1H22
U.S.
(21.8)
17.7
(55.4)
n/a
14.2
International
(9.6)
(2.4)
(38.4)
4.4
8.6
Total reported
(14.8)
5.1
(47.6)
4.4
11.0
Impact of foreign exchange
(2.9)
(3.4)
(1.6)
(7.5)
(2.9)
Impact of CSI acquisition
0.2
—
—
—
0.6
Impact of business exit
(0.2)
(1.6)
—
—
—
Organic
(11.9)
10.1
(46.0)
11.9
13.3
Impact of COVID-19 testing sales (3)
(22.6)
—
(51.7)
—
—
Organic (excluding COVID-19 tests)
10.7
10.1
5.7
11.9
13.3
U.S.
11.7
17.7
2.7
n/a
12.9
International
10.2
5.4
7.5
11.9
13.7
See table titled "Non-GAAP Revenue Reconciliation" for a reconciliation of adjusted historical revenue to reported revenue.
Nutrition
Second Quarter 2023 Results (2Q23)
Sales 2Q23 ($ in millions)
Total
Pediatric
Adult
U.S.
881
507
374
International
1,195
517
678
Total reported
2,076
1,024
1,052
% Change vs. 2Q22
U.S.
15.7
22.5
7.6
International
0.3
1.1
(0.2)
Total reported
6.3
10.6
2.5
Impact of foreign exchange
(3.0)
(2.3)
(3.5)
Impact of business exit
(0.6)
(1.6)
—
Organic
9.9
14.5
6.0
U.S.
15.7
22.5
7.6
International
6.1
7.5
5.2
Worldwide Nutrition sales increased 6.3 percent on a reported basis and 9.9 percent on an organic basis in the second quarter. Refer to table titled "Condensed Consolidated Statement of Earnings" for a reconciliation of adjusted historical revenue to reported revenue.
In Pediatric Nutrition, global sales increased 10.6 percent on a reported basis and 14.5 percent on an organic basis. In the U.S., sales growth of 22.5 percent was primarily driven by continued market share recovery in the infant formula business following a voluntary recall of certain products last year.
In Adult Nutrition, global sales increased 2.5 percent on a reported basis and 6.0 percent on an organic basis, which was led by strong global growth of Ensure, Abbott’s market-leading complete and balanced nutrition brand.
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First Half 2023 Results (1H23)
Sales 1H23 ($ in millions)
Total
Pediatric
Adult
U.S.
1,693
966
727
International
2,350
982
1,368
Total reported
4,043
1,948
2,095
% Change vs. 1H22
U.S.
17.7
28.6
5.8
International
(2.4)
(3.8)
(1.4)
Total reported
5.1
9.9
1.0
Impact of foreign exchange
(3.4)
(2.6)
(4.1)
Impact of business exit
(1.6)
(3.8)
—
Organic
10.1
16.3
5.1
U.S.
17.7
28.6
5.8
International
5.4
6.4
4.8
Diagnostics
Second Quarter 2023 Results (2Q23)
Sales 2Q23 ($ in millions)
Total
Core Laboratory
Molecular
Point of Care
Rapid
Diagnostics *
U.S.
961
311
43
99
508
International
1,356
982
98
43
233
Total reported
2,317
1,293
141
142
741
% Change vs. 2Q22
U.S.
(60.7)
8.6
(40.1)
(2.3)
(74.4)
International
(26.8)
5.1
(29.9)
13.1
(68.5)
Total reported
(46.0)
5.9
(33.3)
1.9
(72.8)
Impact of foreign exchange
(1.3)
(3.6)
(1.2)
(0.5)
(0.5)
Organic
(44.7)
9.5
(32.1)
2.4
(72.3)
Impact of COVID-19 testing sales (3)
(51.8)
(0.6)
(30.8)
—
(75.6)
Organic (excluding COVID-19 tests)
7.1
10.1
(1.3)
2.4
3.3
U.S.
5.2
9.4
3.4
(2.3)
4.0
International
8.2
10.4
(3.1)
15.2
2.3
As expected, Diagnostics sales growth in the second quarter was negatively impacted by year-over-year declines in COVID-19 testing-related sales3. Worldwide COVID-19 testing sales were $263 million in the second quarter of 2023 compared to $2.324 billion in the second quarter of the prior year.
Excluding COVID-19 testing-related sales, global Diagnostics sales increased 4.3 percent on a reported basis and 7.1 percent on an organic basis.
View News Release Full Screen
First Half 2023 Results (1H23)
Sales 1H23 ($ in millions)
Total
Core Laboratory
Molecular
Point of Care
Rapid
Diagnostics *
U.S.
2,296
600
90
192
1,414
International
2,709
1,875
198
84
552
Total reported
5,005
2,475
288
276
1,966
% Change vs. 1H22
U.S.
(55.4)
8.2
(63.2)
0.1
(66.0)
International
(38.4)
1.3
(48.9)
11.2
(73.5)
Total reported
(47.6)
2.9
(54.4)
3.2
(68.5)
Impact of foreign exchange
(1.6)
(4.4)
(1.1)
(0.8)
(0.6)
Organic
(46.0)
7.3
(53.3)
4.0
(67.9)
Impact of COVID-19 testing sales (3)
(51.7)
(1.3)
(38.8)
—
(73.6)
Organic (excluding COVID-19 tests)
5.7
8.6
(14.5)
4.0
5.7
U.S.
2.7
9.2
(21.0)
0.1
1.5
International
7.5
8.5
(11.6)
14.0
12.3
*The Acelis Connected Health business was internally transferred from Rapid Diagnostics to Heart Failure on January 1, 2023. As
a result, $28 million of sales in the second quarter of 2022 and $57 million in the first half 2022 were moved from Rapid Diagnostics
to Heart Failure.
Established Pharmaceuticals
Second Quarter 2023 Results (2Q23)
Sales 2Q23 ($ in millions)
Total
Key Emerging
Markets
Other
U.S.
—
—
—
International
1,287
990
297
Total reported
1,287
990
297
% Change vs. 2Q22
U.S.
n/a
n/a
n/a
International
5.2
4.6
7.1
Total reported
5.2
4.6
7.1
Impact of foreign exchange
(7.4)
(8.4)
(4.4)
Organic
12.6
13.0
11.5
U.S.
n/a
n/a
n/a
International
12.6
13.0
11.5
Established Pharmaceuticals sales increased 5.2 percent on a reported basis and 12.6 percent on an organic basis in the second quarter.
Key Emerging Markets include several emerging countries that represent the most attractive long-term growth opportunities for Abbott’s branded generics product portfolio. Sales in these geographies increased 4.6 percent on a reported basis and 13.0 percent on an organic basis, led by growth in several geographies and therapeutic areas, including gastroenterology, women’s health, and central nervous system/pain management.
First Half 2023 Results (1H23)
Sales 1H23 ($ in millions)
Total
Key Emerging
Markets
Other
U.S.
—
—
—
International
2,476
1,902
574
Total reported
2,476
1,902
574
% Change vs. 1H22
U.S.
n/a
n/a
n/a
International
4.4
2.7
10.8
Total reported
4.4
2.7
10.8
Impact of foreign exchange
(7.5)
(8.0)
(5.5)
Organic
11.9
10.7
16.3
U.S.
n/a
n/a
n/a
International
11.9
10.7
16.3
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Medical Devices
Second Quarter 2023 Results (2Q23)
Sales 2Q23 ($ in millions)
Total
Rhythm
Management
Electro-
physiology
Heart
Failure *
Vascular
Structural
Heart
Neuro-
modulation
Diabetes
Care
U.S.
1,913
269
245
226
264
219
185
505
International
2,382
314
308
69
451
279
42
919
Total reported
4,295
583
553
295
715
498
227
1,424
% Change vs. 2Q22
U.S.
13.3
2.0
8.8
8.9
15.4
5.9
17.6
26.6
International
13.6
10.3
18.7
11.9
6.1
19.8
5.1
15.8
Total reported
13.5
6.3
14.1
9.6
9.3
13.3
15.1
19.4
Impact of foreign exchange
(1.9)
(1.9)
(2.8)
(0.3)
(2.3)
(1.5)
(1.1)
(2.0)
Impact of CSI acquisition
1.2
—
—
—
6.6
—
—
—
Organic
14.2
8.2
16.9
9.9
5.0
14.8
16.2
21.4
U.S.
11.0
2.0
8.8
8.9
(1.9)
5.9
17.6
26.6
International
16.8
14.0
23.9
13.2
8.7
22.6
10.5
18.8
Worldwide Medical Devices sales increased 13.5 percent on a reported basis and 14.2 percent on an organic basis in the second quarter. Sales growth was led by double-digit organic growth in Diabetes Care, Electrophysiology, Structural Heart and Neuromodulation. Several recently launched products and new indications contributed to the strong performance, including Amplatzer Amulet, Navitor, TriClip, and Aveir.
In Electrophysiology, internationally, sales grew high-teens on a reported basis and more than 20 percent on an organic basis, which includes high-teens growth in Europe.
In Diabetes Care, FreeStyle Libre sales were $1.3 billion, which represents sales growth of 22.9 percent on a reported basis and 24.7 percent on an organic basis.
View News Release Full Screen
First Half 2023 Results (1H23)
Sales 1H23 ($ in millions)
Total
Rhythm
Management
Electro-
physiology
Heart
Failure *
Vascular
Structural
Heart
Neuro-
modulation
Diabetes
Care
U.S.
3,691
529
483
444
482
429
340
984
International
4,504
581
575
132
850
530
83
1,753
Total reported
8,195
1,110
1,058
576
1,332
959
423
2,737
% Change vs. 1H22
U.S.
14.2
3.2
9.4
10.0
10.3
8.1
13.2
32.7
International
8.6
3.6
8.7
14.1
1.8
16.8
9.1
11.2
Total reported
11.0
3.4
9.0
10.9
4.7
12.8
12.4
18.1
Impact of foreign exchange
(2.9)
(2.8)
(3.8)
(0.8)
(3.1)
(2.7)
(1.4)
(3.1)
Impact of CSI acquisition
0.6
—
—
—
3.4
—
—
—
Organic
13.3
6.2
12.8
11.7
4.4
15.5
13.8
21.2
U.S.
12.9
3.2
9.4
10.0
1.3
8.1
13.2
32.7
International
13.7
8.9
15.7
17.4
6.1
22.0
16.1
15.8