Investors, however, seemed to react negatively to the company’s year-over-year decline in earnings and sales in Q3. Even as Abbott management spoke of improved sales growth for the U.S. medical devices business, BTIG analysts noted that medical device sales missed by $215 million.
The Abbott Park, Illinois–based life science tech company especially benefitted from the U.S. launch of the next-gen FreeStyle Libre 3 14-day CGM after FDA clearance in May. Abbott says the FreeStyle Libre 3 has the smallest and thinnest CGM sensor in the world. FreeStyle Libre sales were roughly $1 billion in Q3 — up 40% in the U.S. The Irish government announced in May that Abbott will spend €440 million ($450 million) to expand FreeStyle Libre production in the country.
Still, international sales of the first generation of the FreeStyle Libre dragged in emerging markets amid supply chain constraints, dragging sales outside the U.S.
Abbott earned $1.4 billion, or 81¢ per share, off $10.4 billion in revenue for the quarter ended Sept. 30, 2022, for a bottom-line slide of nearly 32% and a top-line cut of 4.7% compared with Q3 2021.
Adjusted to exclude one-time items, Abbott earned $1.15, 21¢ ahead of The Street, where analysts were looking for EPS of 94¢ on revenue of $9.68 billion.
“Our results and increased guidance in the current macroeconomic environment reflect the strength of our diversified business model and execution,” Abbott CEO Robert B. Ford said in a news release. “We’re particularly pleased with improving sales growth rates in U.S. Medical Devices, which is being fueled by several recent product launches, as well as continued strong performance in Established Pharmaceuticals.”
Worldwide Medical Devices sales were down 0.5%, to $3.6 billion, on a reported basis in Q3. However, they increased 6.4% on an organic basis. In addition to Diabetes Care products, the medical devices business saw strong double-digit U.S. sales growth in Electrophysiology and Structural Heart. Other recent wins for Abbott’s medical device business included FDA approval of its new Proclaim Plus spinal cord stimulation (SCS) system with FlexBurst360.
Abbott is raising its full-year diluted EPS guidance range to $3.75–3.81 and projects adjusted diluted EPS of $5.17-5.23.
Investors reacted by sending ABT shares down more than 6% to $98.14 apiece in morning trading. MassDevice‘s MedTech 100 Index, which includes stocks of the world’s largest medical device companies, was up slightly.
BTIG analysts said Marie Thibault and Sam Eiber: “We adjust our ABT forecast to acknowledge the continued macro worries, but do not see new reasons for concern on the underlying businesses.”