Abbott Laboratories can credit its Covid testing efforts for its second-quarter beat, an analyst said Wednesday. But ABT stock toppled.
During the June quarter, the company's Covid tests generated $2.3 billion in sales. That accounted for more than half of Abbott's diagnostics business. Overall, sales from that division grew more than 33%. Excluding the Covid impact, core laboratory diagnostic sales fell 3%.
It's important to note, Covid can't carry the diagnostics business forever. Abbott's guidance reflects that. Through June, the company has tacked on $5.6 billion in Covid testing sales. It expects $6.1 billion in full-year sales from those products, up from prior expectations for $4.5 billion.
"The Covid guide seems de-risked and assumes only about $500 million of contribution in the second half to hit the $6.1 billion (guidance)," Evercore ISI analyst Vijay Kumar said in a report.
On the stock market today, ABT stock slid 1.6% to 108.23.
ABT Stock: Beat And Earnings Raise
During the second quarter, Abbott's adjusted earnings rocketed more than 22% to $1.43 per share and beat forecasts for $1.12. Sales grew about 10% to $11.3 billion. ABT stock analysts had predicted $10.29 billion in sales, according to FactSet.
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Beyond its beastly diagnostics growth, the best performance came from Abbott's established drugs. That segment operates outside the U.S. Sales grew almost 4% on a strict as-reported basis to $1.22 billion. Medical device sales crept 2.5% higher to $3.76 billion.
But sales of nutrition products fell more than 7% to $1.95 billion. That business includes formula for infants. Worldwide sales felt the brunt of a voluntary recall and a manufacturing shutdown in February at a U.S. plant. Abbott restarted partial production on July 1. Still, in the second quarter U.S. sales of formula products fell about 59% to $116 million.
For the year, however, Abbott raised its guidance. The company expects adjusted earnings of at least $4.90 per share. ABT stock analysts were projecting $4.88 in adjusted per-share earnings on $41.73 billion in sales.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
