Abbott Gets Lift From Virus Tests -- WSJ

By Matt Grossman 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (July 17, 2020).

Abbott Laboratories recorded a surge in revenue in its U.S. diagnostics business during the second quarter, fueled by strong demand for the company's Covid-19 testing.

Revenue for the Abbott Park, Ill.-based medical company's U.S. diagnostics segment climbed 23% to $857 million in the period. World-wide, Abbott's diagnostics business grew 4.7% to $1.99 billion.

Abbott provides testing related to Covid-19 on three different platforms. It offers both lab-based and on-site tests for current infections, and provides a lab-based antibody test to check if a person was previously infected with the virus. A decline in testing services for other conditions tempered the segment's results, however.

Abbott Chief Executive Robert Ford told analysts on a conference call Thursday that he expected demand for the company's Covid-19 testing to endure beyond the end of the year.

"Even when you have a vaccine, I think that I can see patients going to a physician's office with a fever, and they want to know: ... Is it the flu? Is it Covid?" Mr. Ford said. "We think that the capacity that we're building is not only for a high demand during the next 12, 18 or 24 months, but a steady state."

Overall, Abbott's sales decreased as the pandemic disrupted demand for its medical devices used in procedures unrelated to the new coronavirus. Sales of medical devices fell 21.2% to $2.42 billion.

The company's revenue overall declined to $7.33 billion from the $7.98 billion recorded in last year's second quarter -- a drop of 8.2%, or 5.4% on an organic basis, which excluded the impact of foreign exchange. Analysts polled by FactSet had estimated quarterly revenue of $6.81 billion.

Sales for Abbott's pharmaceuticals business -- which serves international markets -- declined 8.6% in the quarter to $1.01 billion. Strong growth for the segment in China was offset in countries experiencing continued Covid-19 outbreaks such as Russia, Brazil and Colombia.

The company's overall profit declined to $537 million, or 30 cents a share, from $1.01 billion, or 56 cents a share, in the same period a year earlier.

Adjusted earnings were 57 cents a share. Analysts had forecast adjusted earnings of 42 cents a share.

Abbott also reinstated full-year guidance, forecasting adjusted earnings of at least $3.25 a share, with a spokesman attributing the outlook to momentum the company is beginning to register. Abbott had canceled previous guidance in April, citing uncertainty about the course of the pandemic.

Write to Matt Grossman at [e-mail]

(END) Dow Jones Newswires

July 17, 2020 02:47 ET (06:47 GMT)

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