Abbott Laboratories easily beat Wall Street's fourth-quarter estimates Wednesday, but ABT stock skidded on light earnings guidance and a clouded Covid future.
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.
On today's stock market, ABT stock fell 2.6% to close at 120.07.
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.
