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Abbott Q4 Diagnostics Revenues Grow 3 Percent, Full-Year Revenues up 25 Percent

NEW YORK — Abbott reported Wednesday morning that its fourth quarter diagnostics revenues rose 3 percent year over year, largely as a result of rapid COVID-19 testing.

For the three months ended Dec. 31, 2021, the Abbott Park, Illinois-based firm reported overall revenues of $11.47 billion, up 7 percent from $10.7 billion a year ago and beating the consensus Wall Street estimate of $10.71 billion. Organic sales, which excluded the impact of foreign currency exchange, grew 8 percent year over year.

Abbott said revenues from its diagnostics business rose 3 percent from the prior-year quarter to $4.47 billion from $4.35 billion. Within diagnostics, core laboratory revenues grew 2 percent to $1.35 billion from $1.32 billion; molecular revenues declined 29 percent to $345 million from $482 million; point-of-care revenues rose 5 percent to $135 million from $129 million; and rapid diagnostics revenues were $2.64 billion, up 10 percent from $2.41 billion in the prior-year quarter.

Global COVID-19 testing-related sales were $2.3 billion in the fourth quarter, including $2.1 billion from rapid tests BinaxNow, Panbio, and ID Now. On a conference call to discuss the firm's financial results, CEO Robert Ford added that Abbott provided approximately 300 million COVID-19 tests in the fourth quarter, with 90 percent of those sales coming from rapid tests.

In the US, diagnostics sales were up nearly 21 percent compared to the prior year, while international sales were down 12 percent. Excluding COVID-19 testing-related sales, worldwide diagnostics revenues rose 8 percent on a reported basis and 9 percent on an organic basis.

Molecular diagnostics and rapid diagnostics sales were negatively impacted by lower COVID-19-related sales, but excluding those, MDx revenues were up 24 percent and rapid diagnostics sales increased 10 percent on a reported and organic basis.

Ford said that Abbott has continued to roll out its Alinity platforms, placing more than 3,000 instruments for immunoassay and clinical chemistry testing in 2021.

Abbott's nutrition revenues rose nearly 6 percent to $2.04 billion from $1.94 billion; established pharmaceuticals revenues rose 5 percent to $1.20 billion from $1.15 billion; and medical devices revenues rose 15 percent to $3.75 billion from $3.26 billion.

Abbott reported net earnings of $1.99 billion, or $1.11 per share, in Q4 2021 compared to $2.16 billion, or $1.20 per share, in the year-ago period. Adjusted EPS for the recently completed quarter was $1.32 and beat the consensus Wall Street estimate of $1.21.

The firm spent $762 million on R&D in Q4, up 9 percent from $698 million in Q4 2020, and logged $3.05 billion in SG&A expenses, up 19 percent from $2.57 billion in the prior-year quarter.

For full-year 2021, the firm reported total revenues of $43.08 billion, up nearly 25 percent from $34.61 billion a year ago, beating the average Wall Street estimate of $42.29 billion. On an organic basis, total revenues were up 23 percent.

Abbott reported $15.64 billion in diagnostics revenues in 2021, up 45 percent from $10.81 billion in 2020 and up 43 percent on an organic basis.

Within diagnostics, molecular diagnostics revenues totaled $1.43 billion in 2021, down 1 percent from $1.44 billion in 2020. Core laboratory revenues were $5.13 billion, up 15 percent from $4.48 billion in 2020. Point-of-care revenues were $536 million, up 4 percent from $516 million a year ago, and rapid diagnostics revenues were $8.56 billion, up 95 percent from $4.38 billion in 2020.

Global COVID-19 testing-related sales for the full year were $7.7 billion, and the firm said it has distributed more than 1.4 billion COVID-19 tests since the beginning of the pandemic.

Regarding its other business units, 2021 nutrition revenues rose nearly 9 percent year over year to $8.29 billion from $7.65 billion; established pharmaceuticals revenues rose 10 percent to $4.72 billion from $4.30 billion; and medical devices revenues rose 22 percent to $14.37 billion from $11.79 billion.

Abbott's 2021 R&D expenses rose 13 percent to $2.74 billion from $2.42 billion, while its SG&A expenses rose 17 percent to $11.32 billion from $9.70 billion.

The company reported a 2021 net income of $7.07 billion, or $3.94 per share, compared to $4.50 billion, or $2.50 per share, in 2020. The firm's 2021 adjusted EPS from continuing operations was $5.21 per share, beating the consensus Wall Street estimate of $5.10 per share.

Abbott said it anticipates full-year 2022 earnings per share from continuing operations of at least $3.43. Adjusted EPS from continuing operations for 2022 is expected to be at least $4.70. The full-year forecast anticipates COVID-19 testing-related sales of $2.5 billion, which the firm expects to occur early in the year.

Excluding COVID-19 tests, the company expects sales growth in the base business to be in the high single digits, Ford said. / Abbott is seeing "very strong demand" for COVID-19 testing at the start of 2022, he added, due to the rise of the Omicron variant, but forecasting for the full year remains "challenging" and the company will be updating its COVID-19 testing guidance "one quarter at a time."

While the company expects continued COVID-19 testing revenues after the first quarter of 2022, the question is "at what level" demand will be, he said.

In addition, macroeconomic uncertainties that "aren't necessarily unique to Abbott," including supply chain issues, staffing shortages, and inflation, impacted the firm's financial guidance for 2022, according to Ford.

The company projects Q1 2022 EPS from continuing operations of at least $1.20 and adjusted EPS from continuing operations of at least $1.50.

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