Abbott Reports Fourth-Quarter and Full-Year 2022 Results; Issues 2023 Financial Outlook

Rhea-AI Summary

Abbott (NYSE: ABT) reported fourth-quarter 2022 sales of $10.1 billion, down 12% year-over-year, mainly due to a decline in COVID-19 testing-related sales. Full-year sales reached $43.7 billion, growing 1.3% overall and 6.4% organically. GAAP diluted EPS for the fourth quarter was $0.59 and adjusted EPS was $1.03. For 2023, Abbott projects GAAP EPS of $3.05 to $3.25 and adjusted EPS of $4.30 to $4.50. The company continues to focus on innovation, highlighted by recent FDA approvals of new medical devices.

Positive

• Full-year 2022 sales increased by 1.3%, showing resilience amidst challenges.
• Adjusted diluted EPS exceeded expectations at $1.03 for Q4 2022.
• Strong growth forecast for 2023 with expected organic sales growth in the high-single digits.

Negative

• Fourth-quarter sales decreased by 12% year-over-year due to COVID-19 testing declines.
• Diagnostics sales fell 29% in Q4, significantly affecting overall performance.
• Nutrition sales showed a decline of 11.1% in Q4, impacted by manufacturing disruptions.

• Fourth-quarter sales of $10.1 billion; full-year 2022 sales of $43.7 billion
• Full-year 2022 sales growth of 1.3 percent; organic sales growth of 6.4 percent
• Full-year 2022 GAAP diluted EPS of $3.91; adjusted diluted EPS of $5.34
• Continues to strengthen portfolio with steady cadence of new product approvals

ABBOTT PARK, Ill., Jan. 25, 2023 /PRNewswire/ -- Abbott (NYSE: ABT) today announced financial results for the fourth quarter ended Dec. 31, 2022.

• Fourth-quarter sales of $10.1 billion, which were negatively impacted by an expected year-over-year decline in COVID-19 testing-related sales, decreased 12.0 percent on a reported basis and 6.1 percent on an organic basis, which excludes the impact of foreign exchange.
• Excluding COVID-19 testing-related sales¹, fourth-quarter sales decreased 1.4 percent on a reported basis and increased 5.4 percent on an organic basis.
• Excluding COVID-19 testing-related sales² and U.S. infant formula sales that were impacted by manufacturing disruptions³, full-year 2022 sales increased 1.9 percent on a reported basis and 7.4 percent on an organic basis.
• GAAP diluted EPS was $0.59 in the fourth quarter. Excluding specified items, adjusted diluted EPS was $1.03.
• Abbott issues full-year 2023 guidance for diluted EPS from continuing operations on a GAAP basis of $3.05 to $3.25 and full-year adjusted EPS from continuing operations of $4.30 to $4.50.
• Abbott projects full-year 2023 organic sales growth, excluding COVID-19 testing-related sales, of high-single digits⁴ and COVID-19 testing-related sales of around $2.0 billion.
• In October, Abbott's market-leading FreeStyle Libre^® continuous glucose monitoring system was named the "Best Medical Technology" of the last 50 years by the Galien Foundation.
• In December, Abbott announced U.S. Food and Drug Administration (FDA) approval of its Eterna™ spinal cord stimulation system — the smallest implantable, rechargeable system currently available for the treatment of chronic pain.⁵
• In January, Abbott announced U.S. FDA approval of its minimally invasive Navitor™ transcatheter aortic valve implantation (TAVI) system for people with severe aortic stenosis who are at high risk for surgery.

"We significantly exceeded the EPS guidance we provided at the beginning of last year despite challenging global business conditions," said Robert B. Ford, chairman and chief executive officer, Abbott. "Our R&D pipeline continues to be highly productive with several recent and upcoming new product launches that position us well going forward."

FOURTH-QUARTER BUSINESS OVERVIEW

Note: Management believes that measuring sales growth rates on an organic basis is an appropriate way for investors to best understand the underlying performance of the business. Organic sales growth excludes the impact of foreign exchange. In order to compute results excluding the impact of exchange rates, current year U.S. dollar sales are multiplied or divided, as appropriate, by the current year average foreign exchange rates and then those amounts are multiplied or divided, as appropriate, by the prior year average foreign exchange rates. Management further believes that measuring sales growth rates on an organic basis excluding COVID-19 tests is an appropriate way for investors to best understand the underlying performance of the business in the fourth quarter ended Dec. 31, 2022 as well as in 2023 as the COVID-19 pandemic shifts to an endemic state, resulting in significantly lower expected demand for COVID-19 tests.

Total Company ($ in millions)
								% Change vs. 4Q21
		Sales 4Q22						Reported						Organic
		U.S.		Int'l		Total		U.S.		Int'l		Total		U.S.		Int'l		Total
Total 6		4,219		5,872		10,091		(13.1)		(11.2)		(12.0)		(13.1)		(0.9)		(6.1)
Nutrition		795		1,022		1,817		(14.4)		(8.3)		(11.1)		(14.4)		1.4		(5.7)
Diagnostics		1,695		1,610		3,305		(29.0)		(22.8)		(26.1)		(29.0)		(12.5)		(21.3)
Established Pharmaceuticals		—		1,216		1,216		n/a		1.0		1.0		n/a		7.9		7.9
Medical Devices		1,726		2,024		3,750		12.2		(8.4)		—		12.2		4.1		7.4
								% Change vs. 12M21
		Sales 12M22						Reported						Organic
		U.S.		Int'l		Total		U.S.		Int'l		Total		U.S.		Int'l		Total
Total 6		18,142		25,511		43,653		9.0		(3.5)		1.3		9.0		4.7		6.4
Nutrition		2,919		4,540		7,459		(17.9)		(4.2)		(10.1)		(17.9)		2.5		(6.2)
Diagnostics		8,646		7,938		16,584		21.3		(6.8)		6.0		21.3		1.3		10.4
Established Pharmaceuticals		—		4,912		4,912		n/a		4.1		4.1		n/a		10.6		10.6
Medical Devices		6,566		8,121		14,687		10.9		(3.8)		2.2		10.9		6.2		8.1

n/a = Not Applicable.

 

Worldwide COVID-19 testing-related sales were $1.069 billion in the fourth quarter of 2022 compared to $2.319 billion in the fourth quarter of the prior year. Worldwide COVID-19 testing-related sales were $8.368 billion in the full year of 2022 compared to $7.679 billion in the prior year.

The following tables summarize sales excluding COVID-19 testing-related sales and the change in reported and organic sales excluding COVID-19 testing-related sales in 2022 versus the prior year²: 

								% Change vs. 4Q21
		Sales excl. COVID tests 4Q22						Reported excl. COVID tests						Organic excl. COVID tests
		U.S.		Int'l		Total		U.S.		Int'l		Total		U.S.		Int'l		Total
Total 1		3,443		5,579		9,022		5.8		(5.4)		(1.4)		5.8		5.3		5.4
Diagnostics		919		1,317		2,236		16.8		(3.6)		3.8		16.8		8.0		11.2
								% Change vs. 12M21
		Sales excl. COVID tests 12M22						Reported excl. COVID tests						Organic excl. COVID tests
		U.S.		Int'l		Total		U.S.		Int'l		Total		U.S.		Int'l		Total
Total		12,644		22,641		35,285		2.5		(1.8)		(0.3)		2.5		6.5		5.1
Diagnostics		3,148		5,068		8,216		11.4		(1.4)		3.1		11.4		7.1		8.6
Nutrition ($ in millions)
								% Change vs. 4Q21
		Sales 4Q22						Reported						Organic
		U.S.		Int'l		Total		U.S.		Int'l		Total		U.S.		Int'l		Total
Total		795		1,022		1,817		(14.4)		(8.3)		(11.1)		(14.4)		1.4		(5.7)
Pediatric		454		428		882		(20.4)		(8.9)		(15.2)		(20.4)		(1.2)		(11.8)
Adult		341		594		935		(4.8)		(7.9)		(6.8)		(4.8)		3.4		0.5
								% Change vs. 12M21
		Sales 12M22						Reported						Organic
		U.S.		Int'l		Total		U.S.		Int'l		Total		U.S.		Int'l		Total
Total		2,919		4,540		7,459		(17.9)		(4.2)		(10.1)		(17.9)		2.5		(6.2)
Pediatric		1,562		1,919		3,481		(28.7)		(8.9)		(19.0)		(28.7)		(3.9)		(16.6)
Adult		1,357		2,621		3,978		(0.5)		(0.4)		(0.4)		(0.5)		7.6		4.8

 

Worldwide Nutrition sales decreased 11.1 percent on a reported basis and 5.7 percent on an organic basis in the fourth quarter. Total worldwide Nutrition and Pediatric Nutrition sales were negatively impacted as a result of manufacturing disruptions during 2022 of certain infant formula products³ at Abbott's Sturgis, Michigan, facility. The manufacturing facility has subsequently restarted production.

In Adult Nutrition, global sales decreased 6.8 percent on a reported basis and increased 0.5 percent on an organic basis in the fourth quarter, led by Ensure^®, Abbott's market-leading complete and balanced nutrition brand.

Diagnostics ($ in millions)
								% Change vs. 4Q21
		Sales 4Q22						Reported						Organic
		U.S.		Int'l		Total		U.S.		Int'l		Total		U.S.		Int'l		Total
Total		1,695		1,610		3,305		(29.0)		(22.8)		(26.1)		(29.0)		(12.5)		(21.3)
Core Laboratory		301		963		1,264		0.2		(8.1)		(6.3)		0.2		3.5		2.8
Molecular		62		118		180		(54.2)		(43.9)		(47.9)		(54.2)		(38.6)		(44.7)
Point of Care		88		43		131		(7.6)		7.0		(3.3)		(7.6)		14.4		(1.2)
Rapid Diagnostics		1,244		486		1,730		(33.0)		(38.2)		(34.5)		(33.0)		(28.3)		(31.6)
								% Change vs. 12M21
		Sales 12M22						Reported						Organic
		U.S.		Int'l		Total		U.S.		Int'l		Total		U.S.		Int'l		Total
Total		8,646		7,938		16,584		21.3		(6.8)		6.0		21.3		1.3		10.4
Core Laboratory		1,137		3,751		4,888		(0.7)		(5.8)		(4.7)		(0.7)		2.7		1.9
Molecular		370		625		995		(34.6)		(27.4)		(30.3)		(34.6)		(22.6)		(27.4)
Point of Care		372		153		525		(3.2)		0.8		(2.1)		(3.2)		6.0		(0.6)
Rapid Diagnostics		6,767		3,409		10,176		34.4		(3.1)		19.0		34.4		5.4		22.5

 

As expected, Diagnostics sales in the fourth quarter were negatively impacted by year-over-year declines in COVID-19 testing-related sales. Worldwide COVID-19 testing-related sales were $1.069 billion in the fourth quarter of 2022 compared to $2.319 billion in the fourth quarter of the prior year.

The following tables summarize sales excluding COVID-19 testing-related sales and the change in reported and organic sales excluding COVID-19 testing-related sales in 2022 versus the prior year²:

								% Change vs. 4Q21
		Sales excl. COVID tests 4Q22						Reported excl. COVID tests						Organic excl. COVID tests
		U.S.		Int'l		Total		U.S.		Int'l		Total		U.S.		Int'l		Total
Total		919		1,317		2,236		16.8		(3.6)		3.8		16.8		8.0		11.2
Core Laboratory		298		956		1,254		1.5		(5.3)		(3.8)		1.5		6.8		5.6
Molecular		45		98		143		(0.2)		(8.3)		(5.9)		(0.2)		(0.4)		(0.3)
Point of Care		88		43		131		(7.6)		7.0		(3.3)		(7.6)		14.4		(1.2)
Rapid Diagnostics		488		220		708		38.3		4.6		25.7		38.3		16.8		30.3
								% Change vs. 12M21
		Sales excl. COVID tests 12M22						Reported excl. COVID tests						Organic excl. COVID tests
		U.S.		Int'l		Total		U.S.		Int'l		Total		U.S.		Int'l		Total
Total		3,148		5,068		8,216		11.4		(1.4)		3.1		11.4		7.1		8.6
Core Laboratory		1,121		3,705		4,826		1.3		(2.9)		(2.0)		1.3		5.8		4.8
Molecular		180		404		584		11.4		8.0		9.0		11.4		14.8		13.8
Point of Care		372		153		525		(3.2)		0.8		(2.1)		(3.2)		6.0		(0.6)
Rapid Diagnostics		1,475		806		2,281		25.6		1.3		15.8		25.6		9.4		19.1
Established Pharmaceuticals ($ in millions)
								% Change vs. 4Q21
		Sales 4Q22						Reported						Organic
		U.S.		Int'l		Total		U.S.		Int'l		Total		U.S.		Int'l		Total
Total		—		1,216		1,216		n/a		1.0		1.0		n/a		7.9		7.9
Key Emerging Markets		—		902		902		n/a		3.9		3.9		n/a		10.3		10.3
Other		—		314		314		n/a		(6.5)		(6.5)		n/a		1.9		1.9
								% Change vs. 12M21
		Sales 12M22						Reported						Organic
		U.S.		Int'l		Total		U.S.		Int'l		Total		U.S.		Int'l		Total
Total		—		4,912		4,912		n/a		4.1		4.1		n/a		10.6		10.6
Key Emerging Markets		—		3,728		3,728		n/a		5.4		5.4		n/a		11.8		11.8
Other		—		1,184		1,184		n/a		0.4		0.4		n/a		7.3		7.3

 

Established Pharmaceuticals sales increased 1.0 percent on a reported basis and 7.9 percent on an organic basis in the fourth quarter.

Key Emerging Markets include several emerging countries that represent the most attractive long-term growth opportunities for Abbott's branded generics product portfolio. Sales in these geographies increased 3.9 percent on a reported basis and 10.3 percent on an organic basis, led by strong growth in several geographies including India, China, Brazil and Mexico, and across several therapeutic areas, including cardiometabolic, women's health and central nervous system/pain management.

Medical Devices ($ in millions)
								% Change vs. 4Q21
		Sales 4Q22						Reported						Organic
		U.S.		Int'l		Total		U.S.		Int'l		Total		U.S.		Int'l		Total
Total		1,726		2,024		3,750		12.2		(8.4)		—		12.2		4.1		7.4
Rhythm Management		254		260		514		5.2		(13.3)		(5.0)		5.2		(0.5)		2.1
Electrophysiology		242		245		487		22.7		(19.8)		(3.1)		22.7		(6.6)		4.9
Heart Failure		171		59		230		0.1		(13.9)		(3.9)		0.1		(4.5)		(1.2)
Vascular		214		391		605		(7.5)		(12.5)		(10.8)		(7.5)		(1.4)		(3.5)
Structural Heart		214		227		441		10.9		0.4		5.2		10.9		15.7		13.5
Neuromodulation		163		39		202		3.7		(3.1)		2.3		3.7		11.7		5.3
Diabetes Care		468		803		1,271		34.9		(2.5)		8.6		34.9		9.8		17.3
								% Change vs. 12M21
		Sales 12M22						Reported						Organic
		U.S.		Int'l		Total		U.S.		Int'l		Total		U.S.		Int'l		Total
Total		6,566		8,121		14,687		10.9		(3.8)		2.2		10.9		6.2		8.1
Rhythm Management		1,029		1,090		2,119		1.1		(7.7)		(3.6)		1.1		1.9		1.5
Electrophysiology		909		1,018		1,927		17.0		(9.9)		1.1		17.0		0.7		7.3
Heart Failure		694		226		920		6.2		(4.0)		3.5		6.2		5.2		5.9
Vascular		864		1,619		2,483		(5.6)		(6.9)		(6.4)		(5.6)		1.5		(1.0)
Structural Heart		818		894		1,712		12.0		1.6		6.3		12.0		13.8		13.0
Neuromodulation		619		151		770		0.3		(8.1)		(1.4)		0.3		2.9		0.9
Diabetes Care		1,633		3,123		4,756		34.8		0.2		9.9		34.8		10.6		17.4

 

Worldwide Medical Devices sales were flat on a reported basis and increased 7.4 percent on an organic basis in the fourth quarter. Sales growth in the U.S. was led by strong double-digit growth in Electrophysiology, Structural Heart and Diabetes Care. Internationally, sales growth was negatively impacted by intermittent COVID-19 lockdown restrictions in China as well as supply constraints in certain areas, including Electrophysiology and Diabetes Care.

In Diabetes Care, FreeStyle Libre sales were approximately $1.1 billion in the quarter, including U.S. growth of more than 40 percent.

In 2022, Abbott continued to strengthen its Medical Devices portfolio with several recent pipeline advancements, including U.S. FDA approvals of:

• Navitor, Abbott's latest-generation transcatheter aortic valve implantation (TAVI) system, used for the treatment of severe aortic stenosis.
• Eterna, Abbott's rechargeable spinal cord stimulator used for treating chronic pain.
• Aveir™ leadless pacemaker, used for treating patients with slow heart rhythms.
• An expanded indication of use for CardioMEMS™ HF remote monitoring system, which detects early warning signs of worsening heart failure.
• U.S. FDA clearance of the FreeStyle Libre 3 system, which provides continuous glucose readings and unsurpassed 14-day accuracy⁷ in the world's smallest and thinnest⁷ wearable sensor.

ABBOTT'S EARNINGS-PER-SHARE GUIDANCE

Abbott projects full-year 2023 diluted earnings per share from continuing operations under GAAP of $3.05 to $3.25. Abbott forecasts specified items for the full-year 2023 of $1.25 per share primarily related to intangible amortization, restructuring and cost reduction initiatives and other net expenses. Excluding specified items, projected adjusted diluted earnings per share from continuing operations would be $4.30 to $4.50 for the full-year 2023.

ABBOTT DECLARES 396^TH CONSECUTIVE QUARTERLY DIVIDEND

On Dec. 9, 2022, the board of directors of Abbott declared the company's quarterly dividend of $0.51 per share. Abbott's cash dividend is payable Feb. 15, 2023, to shareholders of record at the close of business on Jan. 13, 2023.

Abbott has increased its dividend payout for 51 consecutive years and is a member of the S&P 500 Dividend Aristocrats Index, which tracks companies that have annually increased their dividend for at least 25 consecutive years.

About Abbott: 

Abbott is a global healthcare leader that helps people live more fully at all stages of life. Our portfolio of life-changing technologies spans the spectrum of healthcare, with leading businesses and products in diagnostics, medical devices, nutritionals and branded generic medicines. Our 115,000 colleagues serve people in more than 160 countries.

Connect with us at www.abbott.com, on LinkedIn at www.linkedin.com/company/abbott-/, on Facebook at www.facebook.com/Abbott and on Twitter @AbbottNews.

Abbott will live-webcast its fourth-quarter earnings conference call through its Investor Relations website at www.abbottinvestor.com at 8 a.m. Central time today. An archived edition of the webcast will be available later in the day.

— Private Securities Litigation Reform Act of 1995 —
A Caution Concerning Forward-Looking Statements

Some statements in this news release may be forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. Abbott cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated in the forward-looking statements. Economic, competitive, governmental, technological and other factors that may affect Abbott's operations are discussed in Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the year ended Dec. 31, 2021, and are incorporated herein by reference. Abbott undertakes no obligation to release publicly any revisions to forward-looking statements as a result of subsequent events or developments, except as required by law.

1	In the fourth quarter of 2022, COVID-19 testing-related sales were $1.069 billion. In the fourth quarter of 2021, total worldwide sales were $11.468 billion, which included U.S. sales of $4.855 billion and International sales of $6.613 billion. In the fourth quarter of 2021, COVID-19 testing-related sales were $2.319 billion.
2	For the full-year 2022, COVID-19 testing-related sales were $8.368 billion. In 2021, total worldwide sales were $43.075 billion, which included U.S. sales of $16.642 billion and International sales of $26.433 billion. For the full-year 2021, COVID-19 testing-related sales were $7.679 billion. Diagnostic sales and COVID-19 testing-related sales in 2022 and 2021 are summarized below:

 

		Sales 4Q22							COVID Tests Sales 4Q22
		U.S.		Int'l		Total			U.S.		Int'l		Total
Total Diagnostics		1,695		1,610		3,305			776		293		1,069
Core Laboratory		301		963		1,264			3		7		10
Molecular		62		118		180			17		20		37
Rapid Diagnostics		1,244		486		1,730			756		266		1,022

 

		Sales 4Q21							COVID Tests Sales 4Q21
		U.S.		Int'l		Total			U.S.		Int'l		Total
Total Diagnostics		2,386		2,085		4,471			1,600		719		2,319
Core Laboratory		300		1,048		1,348			7		39		46
Molecular		135		210		345			89		103		192
Rapid Diagnostics		1,856		787		2,643			1,504		577		2,081

 

		Sales 12M22							COVID Tests Sales 12M22
		U.S.		Int'l		Total			U.S.		Int'l		Total
Total Diagnostics		8,646		7,938		16,584			5,498		2,870		8,368
Core Laboratory		1,137		3,751		4,888			16		46		62
Molecular		370		625		995			190		221		411
Rapid Diagnostics		6,767		3,409		10,176			5,292		2,603		7,895

 

		Sales 12M21							COVID Tests Sales 12M21
		U.S.		Int'l		Total			U.S.		Int'l		Total
Total Diagnostics		7,129		8,515		15,644			4,302		3,377		7,679
Core Laboratory		1,145		3,983		5,128			37		167		204
Molecular		566		861		1,427			405		487		892
Rapid Diagnostics		5,034		3,519		8,553			3,860		2,723		6,583

3	U.S. sales of certain infant formula products impacted by the 2022 manufacturing disruptions were $202 million in 4Q22 and $329 million in 4Q21 and $479 million for the full-year 2022 and $1.229 billion for the full-year 2021. Excluding COVID-19 testing-related sales and U.S. infant formula sales that were impacted by manufacturing disruptions, fourth-quarter sales were flat on a reported basis and increased 7.1 percent on an organic basis.
4	Abbott has not provided the GAAP financial measure for organic sales growth, excluding COVID-19 testing-related sales, on a forward-looking basis because the company is unable to predict the impact of foreign exchange due to the unpredictability of future changes in foreign exchange rates, which could significantly impact reported sales growth.
5	Abbott. Eterna SCS IPG Size Comparison Memo (MAT-2210151); 2022.
6	Total Abbott sales include Other Sales of approximately $3 million in 4Q22 and approximately $11 million in 12M22.
7	Data on file, Abbott Diabetes Care. Comparison based on publicly available information.

 

Abbott Laboratories and Subsidiaries Condensed Consolidated Statement of Earnings Fourth Quarter Ended December 31, 2022 and 2021 (in millions, except per share data) (unaudited)
	4Q22		4Q21		% Change
Net Sales	$10,091		$11,468		(12.0)
Cost of products sold, excluding amortization expense	4,593		4,766		(3.6)
Amortization of intangible assets	496		514		(3.7)
Research and development	725		762		(4.8)
Selling, general, and administrative	2,973		3,048		(2.5)
Total Operating Cost and Expenses	8,787		9,090		(3.3)
Operating Earnings	1,304		2,378		(45.2)
Interest expense, net	66		120		(45.2)
Net foreign exchange (gain) loss	(14)		(6)		n/m
Other (income) expense, net	(68)		(63)		8.1
Earnings before taxes	1,320		2,327		(43.3)
Taxes on earnings	287		338		(15.2)	1)
Net Earnings	$1,033		$1,989		(48.1)
Net Earnings excluding Specified Items, as described below	$1,811		$2,366		(23.4)	2)
Diluted Earnings per Common Share	$0.59		$1.11		(46.8)
Diluted Earnings per Common Share, excluding Specified Items, as described below	$1.03		$1.32		(22.0)	2)
Average Number of Common Shares Outstanding Plus Dilutive Common Stock Options	1,754		1,782

NOTES:

See table titled "Non-GAAP Reconciliation of Financial Information" for additional details regarding specified items.

n/m = Percent change is not meaningful.

See footnotes on the following below.

1)	2021 Taxes on Earnings includes the recognition of approximately $40 million of net tax benefits as a result of the resolution of various tax positions related to prior years and approximately $45 million in excess tax benefits associated with share-based compensation.
2)	2022 Net Earnings and Diluted Earnings per Common Share, excluding Specified Items, excludes net after-tax charges of $778 million, or $0.44 per share, for intangible amortization, charges related to restructuring and cost reduction initiatives, expenses associated with acquisitions, and other net expenses.
	2021 Net Earnings and Diluted Earnings per Common Share from Continuing Operations, excluding Specified Items, excludes net after-tax charges of $377 million, or $0.21 per share, for intangible amortization and other expenses primarily associated with restructuring actions and acquisitions, partially offset by a change in estimate to the restructuring actions recognized in the second quarter of 2021 related to Abbott's manufacturing network for COVID-19 diagnostic tests to reflect current and projected demand.

 

Abbott Laboratories and Subsidiaries Condensed Consolidated Statement of Earnings Twelve Months Ended December 31, 2022 and 2021 (in millions, except per share data) (unaudited)
	12M22		12M21		% Change
Net Sales	$43,653		$43,075		1.3
Cost of products sold, excluding amortization expense	19,142		18,537		3.3
Amortization of intangible assets	2,013		2,047		(1.7)
Research and development	2,888		2,742		5.3
Selling, general, and administrative	11,248		11,324		(0.7)
Total Operating Cost and Expenses	35,291		34,650		1.8
Operating Earnings	8,362		8,425		(0.7)
Interest expense, net	375		490		(23.4)
Net foreign exchange (gain) loss	2		1		n/m
Other (income) expense, net	(321)		(277)		16.0
Earnings before taxes	8,306		8,211		1.2
Taxes on earnings	1,373		1,140		20.5	1)
Net Earnings	$6,933		$7,071		(2.0)
Net Earnings excluding Specified Items, as described below	$9,466		$9,367		1.1	2)
Diluted Earnings per Common Share	$3.91		$3.94		(0.8)
Diluted Earnings per Common Share, excluding Specified Items, as described below	$5.34		$5.21		2.5	2)
Average Number of Common Shares Outstanding Plus Dilutive Common Stock Options	1,764		1,789

NOTES:

See table titled "Non-GAAP Reconciliation of Financial Information" for additional details regarding specified items.

n/m = Percent change is not meaningful.

See footnotes on the following below.

1)	2022 Taxes on Earnings includes the recognition of approximately $20 million of net tax expense as a result of the resolution of various tax positions related to prior years and approximately $43 million in excess tax benefits associated with share-based compensation.
	2021 Taxes on Earnings includes the recognition of approximately $55 million of net tax benefits as a result of the resolution of various tax positions related to prior years and approximately $145 million in excess tax benefits associated with share-based compensation.
2)	2022 Net Earnings and Diluted Earnings per Common Share, excluding Specified Items, excludes net after-tax charges of $2.533 billion, or $1.43 per share, for intangible amortization, charges related to a voluntary recall and restructuring actions, the impairment of R&D intangible assets, acquisition-related costs and other net expenses.
	2021 Net Earnings and Diluted Earnings per Common Share from Continuing Operations, excluding Specified Items, excludes net after-tax charges of $2.296 billion, or $1.27 per share, for intangible amortization and other net expenses primarily associated with restructuring actions, certain litigation and acquisitions.

 

Abbott Laboratories and Subsidiaries Non-GAAP Reconciliation of Financial Information Fourth Quarter Ended December 31, 2022 and 2021 (in millions, except per share data) (unaudited)
	4Q22
	As Reported (GAAP)		Specified Items		As Adjusted
Intangible Amortization	$           496		$         (496)		$             —
Gross Margin	5,002		612		5,614
R&D	725		(71)		654
SG&A	2,973		(144)		2,829
Other (income) expense, net	(68)		(24)		(92)
Earnings before taxes	1,320		851		2,171
Taxes on Earnings	287		73		360
Net Earnings	1,033		778		1,811
Diluted Earnings per Share	$         0.59		$         0.44		$         1.03

 

Specified items reflect intangible amortization expense of $496 million and other net expenses of $355 million associated with restructuring actions, costs associated with acquisitions and other expenses. See table titled "Non-GAAP Reconciliation of Financial Information" for additional details regarding specified items.

	4Q21
	As Reported (GAAP)		Specified Items		As Adjusted
Intangible Amortization	$           514		$         (514)		$             —
Gross Margin	6,188		434		6,622
R&D	762		(39)		723
SG&A	3,048		(43)		3,005
Other (income) expense, net	(63)		(5)		(68)
Earnings before taxes	2,327		521		2,848
Taxes on Earnings	338		144		482
Net Earnings	1,989		377		2,366
Diluted Earnings per Share	$         1.11		$         0.21		$         1.32

 

Specified items reflect intangible amortization expense of $514 million and other net expenses of $7 million that includes costs associated with acquisitions and other expenses, partially offset by a change in estimate to the restructuring actions recognized in the second quarter of 2021. See tables titled "A reconciliation of the fourth-quarter tax rates for 2022 and 2021" for additional details regarding specified items.

 

Abbott Laboratories and Subsidiaries Non-GAAP Reconciliation of Financial Information Twelve Months Ended December 31, 2022 and 2021 (in millions, except per share data) (unaudited)
	12M22
	As Reported (GAAP)		Specified Items		As Adjusted
Intangible Amortization	$       2,013		$     (2,013)		$             —
Gross Margin	22,498		2,351		24,849
R&D	2,888		(282)		2,606
SG&A	11,248		(236)		11,012
Other (income) expense, net	(321)		(55)		(376)
Earnings before taxes	8,306		2,924		11,230
Taxes on Earnings	1,373		391		1,764
Net Earnings	6,933		2,533		9,466
Diluted Earnings per Share	$         3.91		$         1.43		$         5.34

 

Specified items reflect intangible amortization expense of $2.013 billion and other net expenses of $911 million that includes charges for the impairment of R&D intangible assets, costs associated with a product recall and restructuring actions, acquisition-related costs, and other net expenses. See tables titled "Details of Specified Items" for additional details regarding specified items.

 

	12M21
	As Reported (GAAP)		Specified Items		As Adjusted
Intangible Amortization	$       2,047		$     (2,047)		$             —
Gross Margin	22,491		2,476		24,967
R&D	2,742		(106)		2,636
SG&A	11,324		(317)		11,007
Other (income) expense, net	(277)		25		(252)
Earnings before taxes	8,211		2,874		11,085
Taxes on Earnings	1,140		578		1,718
Net Earnings	7,071		2,296		9,367
Diluted Earnings per Share	$         3.94		$         1.27		$         5.21

 

Specified items reflect intangible amortization expense of $2.047 billion and other net expenses of $827 million, primarily associated with restructuring actions, certain litigation, acquisitions and other expenses. See tables titled "Details of Specified Items" for additional details regarding specified items.

 

A reconciliation of the fourth-quarter tax rates for 2022 and 2021 is shown below:
	4Q22
($ in millions)	Pre-Tax Income		Taxes on Earnings		Tax Rate
As reported (GAAP)	$       1,320		$           287		21.7 %
Specified items	851		73
Excluding specified items	$       2,171		$           360		16.5 %
	4Q21
($ in millions)	Pre-Tax Income		Taxes on Earnings		Tax Rate
As reported (GAAP)	$       2,327		$           338		14.5 %	1)
Specified items	521		144
Excluding specified items	$       2,848		$           482		16.9 %

1)	2021 Taxes on Earnings includes the recognition of approximately $40 million of net tax benefits as a result of the resolution of various tax positions related to prior years and approximately $45 million in excess tax benefits associated with share-based compensation.

 

A reconciliation of the year-to-date tax rates for 2022 and 2021 is shown below:
	12M22
($ in millions)	Pre-Tax Income		Taxes on Earnings		Tax Rate
As reported (GAAP)	$       8,306		$       1,373		16.5 %	2)
Specified items	2,924		391
Excluding specified items	$     11,230		$       1,764		15.7 %
	12M21
($ in millions)	Pre-Tax Income		Taxes on Earnings		Tax Rate
As reported (GAAP)	$       8,211		$       1,140		13.9 %	3)
Specified items	2,874		578
Excluding specified items	$     11,085		$       1,718		15.5 %

2)	2022 Taxes on Earnings includes the recognition of approximately $20 million of net tax expense as a result of the resolution of various tax positions related to prior years and approximately $43 million in excess tax benefits associated with share-based compensation.
3)	2021 Taxes on Earnings includes the recognition of approximately $55 million of net tax benefits as a result of the resolution of various tax positions related to prior years and approximately $145 million in excess tax benefits associated with share-based compensation.

 

Abbott Laboratories and Subsidiaries Details of Specified Items Fourth Quarter Ended December 31, 2022 (in millions, except per share data) (unaudited)
		Acquisition or Divestiture- related (a)		Restructuring and Cost Reduction Initiatives (b)		Intangible Amortization		Other (c)		Total Specifieds
Gross Margin		$                 23		$                 87		$               496		$                   6		$               612
R&D		(6)		(34)		—		(31)		(71)
SG&A		(7)		(135)		—		(2)		(144)
Other (income) expense, net		3		—		—		(27)		(24)
Earnings before taxes		$                 33		$               256		$               496		$                 66		851
Taxes on Earnings (d)										73
Net Earnings										$               778
Diluted Earnings per Share										$              0.44

 

The table above provides additional details regarding the specified items described on table titled "Condensed Consolidated Statement of Earnings."
a)	Acquisition-related expenses include integration costs, which represent incremental costs directly related to integrating the acquired businesses and include expenditures for the integration of systems, processes and business activities.
b)	Restructuring and cost reduction initiative expenses include severance, outplacement, and other direct costs associated with specific restructuring plans and cost reduction initiatives.
c)	Other includes incremental costs to comply with the European Union's Medical Device Regulations (MDR) and In Vitro Diagnostics Medical Device Regulations (IVDR) requirements for previously approved products as well as the impairment of an equity investment.
d)	Reflects the net tax benefit associated with the specified items.

 

Abbott Laboratories and Subsidiaries Details of Specified Items Fourth Quarter Ended December 31, 2021 (in millions, except per share data) (unaudited)
		Acquisition or Divestiture- related (a)		Restructuring and Cost Reduction Initiatives (b)		Intangible Amortization		Other (c)		Total Specifieds
Gross Margin		$                 26		$             (110)		$               514		$                   4		$               434
R&D		(6)		(8)		—		(25)		(39)
SG&A		(12)		(23)		—		(8)		(43)
Other (income) expense, net		(2)		—		—		(3)		(5)
Earnings before taxes		$                 46		$               (79)		$               514		$                 40		521
Taxes on Earnings (d)										144
Net Earnings										$               377
Diluted Earnings per Share										$              0.21

 

The table above provides additional details regarding the specified items described on titled "Condensed Consolidated Statement of Earnings."
a)	Acquisition-related expenses include integration costs, which represent incremental costs directly related to integrating the acquired businesses and include expenditures for the integration of systems, processes and business activities.
b)	Restructuring and cost reduction initiative expenses include severance, outplacement, and other direct costs associated with specific restructuring plans and cost reduction initiatives. Restructuring and cost reduction plans consist of distinct initiatives to streamline operations including the consolidation and rationalization of business activities and facilities, workforce reductions, the transfer of product lines between manufacturing facilities, and the transfer of other business activities between sites. The Gross Margin amount includes a credit associated with a change in estimate to the charges taken in the second quarter of 2021 for a restructuring plan related to Abbott's manufacturing network for COVID-19 diagnostic tests to reflect current and projected demand.
c)	Other includes incremental costs to comply with the European Union's MDR and IVDR requirements for previously approved products.
d)	Reflects the net tax benefit associated with the specified items and excess tax benefits associated with share-based compensation.

 

Abbott Laboratories and Subsidiaries Details of Specified Items Twelve Months Ended December 31, 2022 (in millions, except per share data) (unaudited)
	Acquisition or Divestiture- related (a)		Restructuring and Cost Reduction Initiatives (b)		Intangible Amortization		Other (c)		Total Specifieds
Gross Margin	$                 79		$                 86		$            2,013		$               173		$            2,351
R&D	(16)		(38)		—		(228)		(282)
SG&A	(38)		(140)		—		(58)		(236)
Other (income) expense, net	(12)		—		—		(43)		(55)
Earnings before taxes	$               145		$               264		$            2,013		$               502		2,924
Taxes on Earnings (d)									391
Net Earnings									$            2,533
Diluted Earnings per Share									$              1.43

 

The table above provides additional details regarding the specified items described on table titled "Condensed Consolidated Statement of Earnings."
a)	Acquisition-related expenses include integration costs, which represent incremental costs directly related to integrating the acquired businesses and include expenditures for the integration of systems, processes and business activities.
b)	Restructuring and cost reduction initiative expenses include severance, outplacement, and other direct costs associated with specific restructuring plans and cost reduction initiatives. The Gross Margin amount includes a credit associated with the charges taken in the second quarter of 2021 for a restructuring plan related to Abbott's manufacturing network for COVID-19 diagnostic tests.
c)	Other primarily relates to the net costs related to a voluntary recall within the Nutrition segment, charges associated with the impairments of R&D intangible assets and an equity investment acquired in a business combination, incremental costs to comply with the European Union's MDR and IVDR Regulations for previously approved products and costs related to certain litigation.
d)	Reflects the net tax benefit associated with the specified items, excess tax benefits associated with share-based compensation and net tax expense as a result of the resolution of various tax positions related to prior years.

 

Abbott Laboratories and Subsidiaries Details of Specified Items Twelve Months Ended December 31, 2021 (in millions, except per share data) (unaudited)
	Acquisition or Divestiture- related (a)		Restructuring and Cost Reduction Initiatives (b)		Intangible Amortization		Other (c)		Total Specifieds
Gross Margin	$                 82		$               323		$            2,047		$                 24		$            2,476
R&D	(15)		(7)		—		(84)		(106)
SG&A	(55)		(45)		—		(217)		(317)
Other (income) expense, net	1		1		—		23		25
Earnings before taxes	$               151		$               374		$            2,047		$               302		2,874
Taxes on Earnings (d)									578
Net Earnings									$            2,296
Diluted Earnings per Share									$              1.27

  

The table above provides additional details regarding the specified items described on table titled "Condensed Consolidated Statement of Earnings."
a)	Acquisition-related expenses include integration costs, which represent incremental costs directly related to integrating the acquired businesses and include expenditures for the integration of systems, processes and business activities.
b)	Restructuring and cost reduction initiative expenses include severance, outplacement, and other direct costs associated with specific restructuring plans and cost reduction initiatives. Restructuring and cost reduction plans consist of distinct initiatives to streamline operations including the consolidation and rationalization of business activities and facilities, workforce reductions, the transfer of product lines between manufacturing facilities, and the transfer of other business activities between sites. The Gross Margin amount includes charges associated with a restructuring plan to align Abbott's manufacturing network for COVID-19 diagnostic tests with changes during the year in current and projected testing demand.
c)	Other primarily relates to the costs related to certain litigation, the acquisition of a research and development asset, the impairments of an equity investment and an intangible asset, and the gain on the disposition of an equity method investment.
d)	Reflects the net tax benefit associated with the specified items and excess tax benefits associated with share-based compensation.

 

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SOURCE Abbott

FAQ

What were Abbott's Q4 2022 sales figures?

Abbott reported fourth-quarter sales of $10.1 billion.

How did Abbott's full-year 2022 sales perform?

Full-year sales reached $43.7 billion, growing by 1.3%.

What is Abbott's EPS for Q4 2022?

GAAP diluted EPS for Q4 2022 was $0.59, and adjusted EPS was $1.03.

What guidance did Abbott provide for 2023?

Abbott projected a GAAP EPS of $3.05 to $3.25 and adjusted EPS of $4.30 to $4.50.

What impacted Abbott's fourth-quarter sales negatively?

Sales were primarily impacted by a decline in COVID-19 testing-related sales.