ABT Stock Dives On Weak Outlook Despite Covid Test Strength

Abbott Laboratories (ABT) easily beat Wall Street’s fourth-quarter estimates Wednesday, but ABT stock skidded on light earnings guidance and a clouded Covid future.

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During the fourth quarter, Abbott’s Covid test sales sank 1.3% to $2.32 billion. Still, that helped drive better-than-expected quarterly earnings, Edward Jones analyst Ashtyn Evans said in a note to clients.

But for 2022, Abbott guided to at least $4.70 in per-share adjusted earnings. That lagged forecasts by 8 cents, according to FactSet. Company spokeswoman Kate Dyer says the guidance includes an initial view for $2.5 billion for Covid testing sales this year.

“We see our guidance as a prudent starting point, given the unpredictability of the virus and variants,” she said in an email to Investor’s Business Daily.

In early trading on today’s stock market, ABT stock fell 2.1% near 120.70.

ABT Stock: Earnings Beat On Strong Tests

For the fourth quarter, Abbott earned $1.32 per share, minus some items, on $11.47 billion in sales. Earnings sank 9% but handily beat expectations for $1.21 a share. Sales increased 7.2% on a strict as-reported basis and were above expectations for $10.71 billion. Organic sales grew 7.7%.

Excluding the impact of Covid tests, total fourth-quarter sales advanced 9.6% on an as-reported basis and 10.3% organically.

Across the segments, the best growth came from Abbott’s medical devices business. Sales of the unit that includes Abbott’s body-worn diabetes devices, dubbed Libre Freestyle, advanced 15.1% to $3.75 billion. Evercore ISI analyst Vijay Kumar says Libre sales were a notch over $1 billion.

Nutrition sales rose 5.5% to $2.04 billion. Established pharmaceuticals — which sell outside the U.S. — generated $1.2 billion in sales, up 4.9%. The diagnostics unit, which includes Covid testing revenue, ticked up just 2.9% to $4.47 billion.

Kumar has an outperform rating and 145 price target on ABT stock.

“All-in-all, these were solid results,” he said in a note to clients.

Follow Allison Gatlin on Twitter at @IBD_AGatlin.

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