Abbott (NYSE: ABT) reported fourth-quarter results that missed the consensus sales forecast — but medical device sales remain a bright spot.
Shares of ABT dipped 2.1% to $114.31 apiece in pre-market trading today. However, they rose 0.6% to $117.47 after the market opened.
The Abbott Park, Illinois–based company reported profits of $9.2 billion for the quarter. That equals $5.27 per share on sales of $10.97 billion for the three months ended Dec. 31, 2024.
Abbott recorded a massive bottom-line gain from profits of $1.6 billion for this period a year ago. It posted a sales uptick of 7.2%.
Adjusted to exclude one-time items, earnings per share came in at $1.34. That equaled expectations on Wall Street. However, sales came up just short of estimates as experts forecast $11.03 billion in revenue.
The company’s medical device business saw a 13.7% increase in sales, with double-digit growth both in the U.S. and abroad. Abbott pointed to a number of products contributing to the performance, including the FreeStyle Libre continuous glucose monitor, Navitor heart valve, TriClip valve repair device, Amplatzer Amulet appendage occluder and the Aveir pacemaker.
Abbott specifically noted growth in Diabetes, with the Libre CGMs bringing in $1.8 billion in revenue, marking 22.7% growth.
For the full year, Abbott reported $19 billion in medical device sales, increasing by more than $2 billion compared to the previous year.
“We finished the year with very strong momentum. Sales growth and earnings per share growth in the fourth quarter were the highest of the year,” said Robert B. Ford, chair and CEO. “We continued our track record for delivering on our commitments by achieving the upper end of our initial guidance ranges for 2024 and are well-positioned to deliver another year of strong growth in 2025.”
Abbott expects adjusted EPS to range between $5.05 and $5.25 for the full year. It projects sales growth between 7.5% and 8.5%.
Company commentary on growth in the EP business
On the fourth-quarter earnings call, Ford said the company’s Electrophysiology performance — 8% growth in the quarter and 12% for the full year — wasn’t a surprise and wasn’t down due to any adoption of pulsed-field ablation (PFA) technology.
Ford said the company’s mapping technology contributed significantly to growth on the EP front.
“What we did have was an execution of strategy,” Ford said. “What really drove our success in 2024 is what we did in Q4 of 2023, really taking advantage of our ability to offer the only real, truly open mapping system.”
In October 2024, the company announced significant developments within its EP business, including milestones for the Volt PFA system, Advisor HD Grid X mapping catheter and EnSite X EP heart mapping system.
“I think we outperformed many of the expectations about our EP business,” Ford said. “The driver of that has been the team. The team in the field has been spectacular. … I expect to continue to benefit in 2025 from the general increasing procedure trends.”
Abbott stays vigilant on M&A
Ford says Abbott continues to “take a balanced” approach when it comes to M&A, but given an uptick in activity across medtech, the company can always look for potential moves.
“No doubt, there are some good opportunities out there, Ford said. “We’ve got a strong, organic pipeline. It allows us to be selective and look at opportunities that make sense strategically but also generate an attractive return.”
Ford said Abbott remains in “a great position.” The company has some debt (around $1.5 billion) to pay down this year and he doesn’t anticipate rates coming down to the point where the company looks to refinance.
“Even with that, we’re in a great position to, with our balance sheet, be able to leverage opportunities that we’ll see,” he said. “There’s opportunities in medtech, there’s opportunities in diagnostics and we’re in a great position. It allows us to be selective.”
The analysts’ view on Abbott’s Q4 performance
BTIG analysts Marie Thibault, Sam Eiber and Alexandra Pang maintain a “Buy” rating for Abbott, even with the quarterly underperformance.
“Abbott reported a Q4 total revenue miss, much of which we attribute to greater [foreign exchange] headwinds and lower-than-expected COVID testing revenue,” the analysts wrote. Company officials further emphasized the impact of foreign exchange rates on the quarterly earnings call but maintain optimism for the future.
The analysts await future commentary from the company but aren’t too concerned by the three-month results.
“[We] expect this outlook reflects the typical Q1 cadence of seasonally stronger spending as well as greater [foreign exchange] headwinds than currently modeled by the Street,” the analysts wrote. “While [Abbott] shares may trade off this morning on the headline results, we think the underlying strength in device sales and ability to offset [foreign exchange] pressures on the P&L is notable.”