NEW YORK (GenomeWeb) – Abbott said Wednesday that its fourth quarter diagnostic revenues grew 52 percent year over year on a reported basis and 7 percent year over year on a comparable operational basis to $1.91 billion from $1.26 billion in the year-ago period.
For the three months ended Dec. 31, 2017, Abbott reported worldwide revenues of $7.59 billion, up 42 percent from $5.33 billion a year ago, and topping the average Wall Street estimate of $7.39 billion. Sales increased 8 percent on a comparable operational basis.
Within its Diagnostics business segment, molecular diagnostics revenues totaled $122 million, up 4 percent from $117 million in Q4 2016. The firm said that, as expected, growth in infectious disease testing, which is Abbott's core area of focus in the molecular diagnostics market, was partially offset by a planned scale down in other testing areas, primarily in the US.
Core laboratory revenues were $1.1 billion, up 9 percent from $1 billion in Q4 2016. Point of care revenues were $145 million, up 7 percent from $135 million in the prior-year period, led by continued adoption of its i-STAT handheld system.
For a new reporting part of the segment called rapid diagnostics, which represents sales from Abbott's acquisition of Alere in October 2017, the firm reported revenues of $540 million in the quarter, driven by sales in infectious disease testing, including flu and strep.
Abbott CEO Miles White said in a conference call Wednesday to discuss the company's financials that he is satisfied with the pace of integrating Alere into Abbott. He noted that he expects accelerated growth from that business based in part on the strength in demand for rapid diagnostics, but that it would take some time to emerge, perhaps two to three years, due somewhat to internal operational challenges within the business it acquired.
"The addition of Alere expands our presence in one of the few areas in diagnostics where we were not already a leader — the highly attractive rapid diagnostics market," he said. "Over the past few months, [Abbott] made good progress [in] integrating this business and we continue to see several levers for growth acceleration, including opportunities for geographic, platform, and test-menu expansion."
In other business segments, Q4 Nutrition revenues were up 3 percent year over year on a reported basis to $1.78 billion; Established Pharmaceuticals revenues were up 17 percent to $1.15 billion; and Medical Devices revenues grew 102 percent to $2.74 billion.
Abbott's Q4 R&D expenses were up 79 percent compared to a year ago to $613 million from $343 million, while its SG&A expenses were up 53 percent to $2.46 billion from $1.61 billion.
The firm's Q4 net loss was $828 million, or $.48 per share, compared to a gain of $798 million, or $.53 per share, in Q4 2016. The firm said that its reported, diluted loss from continuing operations was primarily due to the net expense of $1.46 billion for the estimated impact of recent changes in US tax laws. Its adjusted EPS from continuing operations, excluding the impact of US tax changes and other specified items, was $.74 per share, exceeding analysts' average consensus estimate of $.73 per share.
For full-year 2017, the firm reported worldwide revenues of $27.39 billion, up 32 percent from $20.85 billion a year ago, and exceeded the average Wall Street estimate of $27.19 billion. On a comparable operational basis, Abbott's 2017 worldwide revenues were up 5 percent from 2016.
Abbott's Diagnostics revenues for 2017 were $5.62 billion, up 17 percent on a reported basis from $4.81 billion in the year-ago period. On an operational basis, Diagnostics revenues increased 6 percent.
Within Diagnostics for 2017, molecular diagnostics revenues totaled $463 million, up 2 percent from $456 million in 2016. Core laboratory revenues were $4.06 billion, up 6 percent from $3.84 billion in 2016. Point of care revenues were $550 million, up 7 percent from $513 million in the prior-year period, and rapid diagnostics revenues were the same as for Q4 at $540 million for the year.
In other business units, 2017 Nutrition revenues were up less than 1 percent year over year to $6.93 billion from $6.90 billion; Established Pharmaceuticals revenues were up 11 percent to $4.29 billion from $3.86 billion; and Medical Devices revenues grew 97 percent to $10.33 billion from $5.23 billion.
Abbott's 2017 R&D expenses were up 57 percent to $2.24 billion from $1.42 billion, while its SG&A expenses were up 37 percent to $9.12 billion from $6.67 billion.
The company's 2017 net income was $477 million, or $.27 per share, compared to $1.40 billion, or $.94 per share, in 2016. The firm's 2017 adjusted EPS from continuing operations, excluding specified items, was $2.50 per share, matching analysts' average consensus estimate.
Abbott issued full-year 2018 guidance for diluted earnings per share from continuing operations under GAAP of $1.22 to $1.32.
It noted that on an adjusted basis, its projected full-year earnings per share from continuing operations are expected to be between $2.80 and $2.90, reflecting 14 percent growth at the midpoint.
On the conference call with analysts, the firm's CFO Brian Yoor said that its 2017 sales baseline for calculating 2018 organic growth is $26.7 billion and excludes sales from Alere as well as from its former medical and optics and vascular closure businesses that it sold during Q1 2017.
Abbott issued first-quarter 2018 guidance for diluted earnings per share from continuing operations under GAAP of $0.16 to $0.18. It forecast specified items for the first quarter of $0.41 per share primarily related to intangible amortization expense, acquisition-related expenses, cost reduction initiatives, and other expenses. The firm noted that excluding specified items, it expected that adjusted diluted earnings per share from continuing operations for Q1 would be between $0.57 and $0.59.
Yoor said he expects mid-single-digit organic growth from diagnostics in Q1 2018 and mid-to-high single-digit growth for the full year.
He said that the firm expects that its Alere rapid diagnostics business would contribute "a little more" than $2 billion for full-year 2018 and $500 million in Q1.
Looking at the effects of the US tax law, and the firm's forecasted mix of global income, "we forecast an adjusted tax rate of 14.5 to 15 percent for the full year 2018," Yoor said.
In early morning trade on the New York Stock Exchange Wednesday, shares of Abbott were up more than 3 percent at $61.30.