Abbott Reports Second-Quarter 2020 Results, Exceeds Analysts' Expectations

Rhea-AI Summary

Abbott reported Q2 2020 sales of $7.3 billion, down 8.2% reported and 5.4% organic. Diluted EPS was $0.30 GAAP and $0.57 adjusted. For 2020, Abbott projects full-year diluted EPS of at least $2.00 GAAP and $3.25 adjusted. Key approvals include the TriClip™ heart valve repair device and FreeStyle® Libre 2 for diabetes monitoring. Notably, Nutrition sales grew 3.1% organically due to strong performance in Adult Nutrition, while Diagnostics surged 23.2%, driven by COVID-19 testing. However, Medical Devices showed a 29% decline.

Positive

• Q2 Nutrition sales increased 3.1% organically, driven by strong Adult Nutrition performance.
• Diagnostics sales surged 23.2% due to COVID-19 testing demands.
• TriClip™ and FreeStyle® Libre 2 received significant regulatory approvals, enhancing product offerings.

Negative

• Total sales decreased 8.2% reported and 5.4% organic in Q2 2020.
• Medical Devices segment saw a 29% decline in sales.
• Established Pharmaceuticals reported an 8.6% drop in international sales.

ABBOTT PARK, Ill., July 16, 2020 /PRNewswire/ -- Abbott (NYSE: ABT) today announced financial results for the second quarter ended June 30, 2020.

• Second-quarter worldwide sales of $7.3 billion decreased 8.2 percent on a reported basis and 5.4 percent on an organic basis, which excludes the impact of foreign exchange.
• Reported diluted EPS from continuing operations under GAAP was $0.30 and adjusted diluted EPS from continuing operations, which excludes specified items, was $0.57 in the second quarter.
• Abbott projects full-year 2020 diluted EPS from continuing operations on a GAAP basis of at least $2.00 and full-year adjusted diluted EPS from continuing operations of at least $3.25.
• In April, Abbott announced CE Mark approval for its TriClip^™ heart valve repair system, the world's first minimally invasive, clip-based tricuspid heart valve repair device.
• In June, Abbott announced U.S. FDA approval of FreeStyle^® Libre 2 as an integrated continuous glucose monitoring (iCGM) system for adults and children ages 4 and older with diabetes, achieving the highest level of accuracy and performance standards.¹  
• Last week, Abbott announced U.S. FDA approval of its next-generation Gallant^™ implantable cardioverter defibrillator and cardiac resynchronization therapy defibrillator devices to help manage heart rhythm disorders. These devices offer Bluetooth technology and a new patient smartphone app for improved remote monitoring and enhanced patient-physician engagement.

"Our diversified business model has proven to be a true strength during this time," said Robert B. Ford, president and chief executive officer, Abbott. "We're a leader in the global COVID-19 testing efforts, we've continued to advance our pipeline and, importantly, we saw significant improvements in growth trends throughout the quarter in the business areas that were initially most impacted by the pandemic."

SECOND-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.

Following are sales by business segment and commentary for the second quarter 2020:

Total Company
($ in millions)

								% Change vs. 2Q19
		Sales 2Q20		Reported		Organic
		U.S.		Int'l		Total		U.S.		Int'l		Total		U.S.		Int'l		Total
Total *		2,638		4,690		7,328		(7.4)		(8.6)		(8.2)		(7.4)		(4.2)		(5.4)
Nutrition		808		1,075		1,883		2.9		(1.4)		0.4		2.9		3.3		3.1
Diagnostics		857		1,137		1,994		23.2		(5.9)		4.7		23.2		(2.2)		7.1
Established Pharmaceuticals		--		1,013		1,013		n/a		(8.6)		(8.6)		n/a		(0.7)		(0.7)
Medical Devices		966		1,457		2,423		(29.0)		(15.0)		(21.2)		(29.0)		(12.7)		(19.9)

* Total Q2 2020 Abbott sales from continuing operations include Other Sales of approximately $15 million.

								% Change vs. 1H19
		Sales 1H20		Reported		Organic
		U.S.		Int'l		Total		U.S.		Int'l		Total		U.S.		Int'l		Total
Total *		5,494		9,560		15,054		(1.9)		(3.5)		(3.0)		(1.9)		0.0		(0.7)
Nutrition		1,620		2,167		3,787		5.7		1.5		3.3		5.7		4.7		5.1
Diagnostics		1,660		2,160		3,820		16.9		(7.1)		2.0		16.9		(3.9)		4.0
Established Pharmaceuticals		--		2,057		2,057		n/a		(2.1)		(2.1)		n/a		4.0		4.0
Medical Devices		2,199		3,161		5,360		(16.6)		(5.2)		(10.2)		(16.6)		(2.7)		(8.8)

* Total 1H 2020 Abbott sales from continuing operations include Other Sales of approximately $30 million.

n/a = Not Applicable.

Note: 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.

Second-quarter 2020 worldwide sales of $7.3 billion decreased 8.2 percent on a reported basis. On an organic basis, worldwide sales decreased 5.4 percent. First-half 2020 worldwide sales of $15.1 billion decreased 3.0 percent on a reported basis and 0.7 percent on an organic basis.

Nutrition
($ in millions)        

													% Change vs. 2Q19
							Sales 2Q20		Reported		Organic
							U.S.		Int'l		Total		U.S.		Int'l		Total		U.S.		Int'l		Total
Total							808		1,075		1,883		2.9		(1.4)		0.4		2.9		3.3		3.1
Pediatric							484		540		1,024		2.1		(6.4)		(2.6)		2.1		(2.2)		(0.3)
Adult							324		535		859		4.2		4.3		4.3		4.2		9.3		7.4
													% Change vs. 1H19
							Sales 1H20		Reported		Organic
							U.S.		Int'l		Total		U.S.		Int'l		Total		U.S.		Int'l		Total
Total							1,620		2,167		3,787		5.7		1.5		3.3		5.7		4.7		5.1
Pediatric							1,002		1,111		2,113		8.0		(3.6)		1.6		8.0		(1.0)		3.0
Adult							618		1,056		1,674		2.2		7.6		5.5		2.2		11.5		7.9

Worldwide Nutrition sales increased 0.4 percent on a reported basis and 3.1 percent on an organic basis in the second quarter. Strong U.S. and international sales performance of Ensure^®, Abbott's market-leading complete and balanced nutrition brand, led to global Adult Nutrition sales growth of 7.4 percent on an organic basis. In Pediatric Nutrition, sales were led by U.S. growth of Pedialyte^®, Abbott's oral rehydration brand, as well as growth in Southeast Asia, which were offset by challenging conditions in Greater China.

For the first half of 2020, worldwide Nutrition sales increased 3.3 percent on a reported basis and 5.1 percent on an organic basis, including organic sales growth of 3.0 percent in Pediatric Nutrition and 7.9 percent in Adult Nutrition.

Diagnostics
($ in millions)

								% Change vs. 2Q19
		Sales 2Q20		Reported		Organic
		U.S.		Int'l		Total		U.S.		Int'l		Total		U.S.		Int'l		Total
Total		857		1,137		1,994		23.2		(5.9)		4.7		23.2		(2.2)		7.1
Core Laboratory		289		698		987		6.4		(22.2)		(15.5)		6.4		(19.0)		(13.1)
Molecular		144		215		359		276.7		209.9

FAQ

What were Abbott's Q2 2020 sales figures?

Abbott reported Q2 2020 worldwide sales of $7.3 billion, an 8.2% decrease on a reported basis.

How much was Abbott's diluted EPS in Q2 2020?

Abbott's diluted EPS from continuing operations was $0.30 under GAAP and $0.57 adjusted in Q2 2020.

What is Abbott's EPS projection for 2020?

Abbott projects a full-year diluted EPS from continuing operations of at least $2.00 GAAP and $3.25 adjusted.

What regulatory approvals did Abbott receive recently?

Abbott received CE Mark approval for TriClip™ and FDA approval for FreeStyle® Libre 2 and Gallant™ devices.

What segment performed well for Abbott in Q2 2020?

The Nutrition segment performed well, with organic sales growth of 3.1% driven by Adult Nutrition products.