Abbott Reports Second-Quarter 2023 Results; Increases Outlook For Underlying Base Business

Rhea-AI Summary

Abbott reports second-quarter financial results with sales of $10.0 billion and strong growth in underlying base business. Adjusted diluted EPS of $1.08. Full-year 2023 outlook remains unchanged.

Positive

• Sales of $10.0 billion driven by strong underlying base business performance. Organic sales growth of 11.5 percent in Medical Devices, Established Pharmaceuticals, and Nutrition. Projected full-year 2023 organic sales growth in low double-digits. New product approvals and expanded reimbursement coverage.

Negative

• Reported sales decreased 11.4 percent due to anticipated decline in COVID-19 testing-related sales. Impact of foreign exchange and business exit. Impact of COVID-19 testing sales at -51.8 percent.

• Sales of $10.0 billion driven by strong underlying base business performance
• Reported sales decreased 11.4 percent due to anticipated decline in COVID-19 testing-related sales versus prior year
• Organic sales growth for underlying base business of 11.5 percent, led by Medical Devices, Established Pharmaceuticals and Nutrition
• Continues to strengthen portfolio with new product approvals and expanded reimbursement coverage

ABBOTT PARK, Ill., July 20, 2023 /PRNewswire/ -- Abbott (NYSE: ABT) today announced financial results for the second quarter ended June 30, 2023.

• Second-quarter GAAP diluted EPS of $0.78 and adjusted diluted EPS of $1.08, which excludes specified items.
• Projected full-year 2023 diluted EPS on a GAAP basis of $3.02 to $3.22.
• Projected full-year adjusted EPS of $4.30 to $4.50 remains unchanged but reflects an increased outlook for the underlying base business offset by a lower forecasted earnings contribution from COVID-19 testing-related sales.
• Abbott now projects full-year 2023 organic sales growth, excluding COVID-19 testing-related sales¹, to be in the low double-digits² and COVID-19 testing-related sales of approximately $1.3 billion.
• In May, Abbott received U.S. Food and Drug Administration (FDA) approval of its TactiFlex^® Ablation Catheter, Sensor Enabled™, the world's first ablation catheter with a unique flexible electrode tip and contact force sensing technology to treat patients with atrial fibrillation (AFib).
• In June, Abbott announced its FreeStyle Libre^® 2 system is the first and only continuous glucose monitoring (CGM) system to receive expanded national reimbursement in France to now include all people with diabetes who use insulin.
• In June, Abbott received U.S. FDA approval of its AVEIR™ dual chamber (DR) leadless pacemaker system, the world's first dual chamber leadless pacing system that treats people with abnormal heart rhythms.

"We're achieving strong growth in our underlying base business," said Robert B. Ford, chairman and chief executive officer, Abbott. "We expect our highly productive pipeline to sustain the momentum we're building this year and position us well for growth in the future."

SECOND-QUARTER BUSINESS OVERVIEW
Management believes that measuring sales growth rates on an organic basis, which excludes the impact of foreign exchange, the impact of exiting the pediatric nutrition business in China, and the impact of the acquisition of Cardiovascular Systems, Inc. (CSI) is an appropriate way for investors to best understand the core underlying performance of the business. 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 underlying base business performance as the COVID-19 pandemic has shifted to an endemic state, resulting in significantly lower demand for COVID-19 tests.

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 2023 Results (2Q23)
Sales 2Q23 ($ in millions)	Total Company		Nutrition		Diagnostics		Established Pharmaceuticals		Medical Devices
U.S.	3,758		881		961		—		1,913
International	6,220		1,195		1,356		1,287		2,382
Total reported	9,978		2,076		2,317		1,287		4,295
% Change vs. 2Q22
U.S.	(23.2)		15.7		(60.7)		n/a		13.3
International	(2.3)		0.3		(26.8)		5.2		13.6
Total reported	(11.4)		6.3		(46.0)		5.2		13.5
Impact of foreign exchange	(2.5)		(3.0)		(1.3)		(7.4)		(1.9)
Impact of CSI acquisition	0.4		—		—		—		1.2
Impact of business exit	(0.1)		(0.6)		—		—		—
Organic	(9.2)		9.9		(44.7)		12.6		14.2
Impact of COVID-19 testing sales (3)	(20.7)		—		(51.8)		—		—
Organic (excluding COVID-19 tests)	11.5		9.9		7.1		12.6		14.2
U.S.	10.9		15.7		5.2		n/a		11.0
International	11.9		6.1		8.2		12.6		16.8
First Half 2023 Results (1H23)
Sales 1H23 ($ in millions)	Total Company		Nutrition		Diagnostics		Established Pharmaceuticals		Medical Devices
U.S.	7,686		1,693		2,296		—		3,691
International	12,039		2,350		2,709		2,476		4,504
Total reported	19,725		4,043		5,005		2,476		8,195
% Change vs. 1H22
U.S.	(21.8)		17.7		(55.4)		n/a		14.2
International	(9.6)		(2.4)		(38.4)		4.4		8.6
Total reported	(14.8)		5.1		(47.6)		4.4		11.0
Impact of foreign exchange	(2.9)		(3.4)		(1.6)		(7.5)		(2.9)
Impact of CSI acquisition	0.2		—		—		—		0.6
Impact of business exit	(0.2)		(1.6)		—		—		—
Organic	(11.9)		10.1		(46.0)		11.9		13.3
Impact of COVID-19 testing sales (3)	(22.6)		—		(51.7)		—		—
Organic (excluding COVID-19 tests)	10.7		10.1		5.7		11.9		13.3
U.S.	11.7		17.7		2.7		n/a		12.9
International	10.2		5.4		7.5		11.9		13.7

See table titled "Non-GAAP Revenue Reconciliation" for a reconciliation of adjusted historical revenue to reported revenue.

Nutrition
Second Quarter 2023 Results (2Q23)
Sales 2Q23 ($ in millions)			Total		Pediatric		Adult
U.S.			881		507		374
International			1,195		517		678
Total reported			2,076		1,024		1,052
% Change vs. 2Q22
U.S.			15.7		22.5		7.6
International			0.3		1.1		(0.2)
Total reported			6.3		10.6		2.5
Impact of foreign exchange			(3.0)		(2.3)		(3.5)
Impact of business exit			(0.6)		(1.6)		—
Organic			9.9		14.5		6.0
U.S.			15.7		22.5		7.6
International			6.1		7.5		5.2

Worldwide Nutrition sales increased 6.3 percent on a reported basis and 9.9 percent on an organic basis in the second quarter. Refer to table titled "Condensed Consolidated Statement of Earnings" for a reconciliation of adjusted historical revenue to reported revenue.

In Pediatric Nutrition, global sales increased 10.6 percent on a reported basis and 14.5 percent on an organic basis. In the U.S., sales growth of 22.5 percent was primarily driven by continued market share recovery in the infant formula business following a voluntary recall of certain products last year.

In Adult Nutrition, global sales increased 2.5 percent on a reported basis and 6.0 percent on an organic basis, which was led by strong global growth of Ensure^®, Abbott's market-leading complete and balanced nutrition brand.

First Half 2023 Results (1H23)
Sales 1H23 ($ in millions)					Total		Pediatric		Adult
U.S.					1,693		966		727
International					2,350		982		1,368
Total reported					4,043		1,948		2,095
% Change vs. 1H22
U.S.					17.7		28.6		5.8
International					(2.4)		(3.8)		(1.4)
Total reported					5.1		9.9		1.0
Impact of foreign exchange					(3.4)		(2.6)		(4.1)
Impact of business exit					(1.6)		(3.8)		—
Organic					10.1		16.3		5.1
U.S.					17.7		28.6		5.8
International					5.4		6.4		4.8
Diagnostics
Second Quarter 2023 Results (2Q23)
Sales 2Q23 ($ in millions)	Total		Core Laboratory		Molecular		Point of Care		Rapid Diagnostics *
U.S.	961		311		43		99		508
International	1,356		982		98		43		233
Total reported	2,317		1,293		141		142		741
% Change vs. 2Q22
U.S.	(60.7)		8.6		(40.1)		(2.3)		(74.4)
International	(26.8)		5.1		(29.9)		13.1		(68.5)
Total reported	(46.0)		5.9		(33.3)		1.9		(72.8)
Impact of foreign exchange	(1.3)		(3.6)		(1.2)		(0.5)		(0.5)
Organic	(44.7)		9.5		(32.1)		2.4		(72.3)
Impact of COVID-19 testing sales (3)	(51.8)		(0.6)		(30.8)		—		(75.6)
Organic (excluding COVID-19 tests)	7.1		10.1		(1.3)		2.4		3.3
U.S.	5.2		9.4		3.4		(2.3)		4.0
International	8.2		10.4		(3.1)		15.2		2.3

As expected, Diagnostics sales growth in the second quarter was negatively impacted by year-over-year declines in COVID-19 testing-related sales³. Worldwide COVID-19 testing sales were $263 million in the second quarter of 2023 compared to $2.324 billion in the second quarter of the prior year.

Excluding COVID-19 testing-related sales, global Diagnostics sales increased 4.3 percent on a reported basis and 7.1 percent on an organic basis.

First Half 2023 Results (1H23)
Sales 1H23 ($ in millions)	Total		Core Laboratory		Molecular		Point of Care		Rapid Diagnostics *
U.S.	2,296		600		90		192		1,414
International	2,709		1,875		198		84		552
Total reported	5,005		2,475		288		276		1,966
% Change vs. 1H22
U.S.	(55.4)		8.2		(63.2)		0.1		(66.0)
International	(38.4)		1.3		(48.9)		11.2		(73.5)
Total reported	(47.6)		2.9		(54.4)		3.2		(68.5)
Impact of foreign exchange	(1.6)		(4.4)		(1.1)		(0.8)		(0.6)
Organic	(46.0)		7.3		(53.3)		4.0		(67.9)
Impact of COVID-19 testing sales (3)	(51.7)		(1.3)		(38.8)		—		(73.6)
Organic (excluding COVID-19 tests)	5.7		8.6		(14.5)		4.0		5.7
U.S.	2.7		9.2		(21.0)		0.1		1.5
International	7.5		8.5		(11.6)		14.0		12.3
*The Acelis Connected Health business was internally transferred from Rapid Diagnostics to Heart Failure on January 1, 2023. As a result, $28 million of sales in the second quarter of 2022 and $57 million in the first half 2022 were moved from Rapid Diagnostics to Heart Failure.

 

Established Pharmaceuticals
Second Quarter 2023 Results (2Q23)
Sales 2Q23 ($ in millions)	Total		Key Emerging Markets		Other
U.S.	—		—		—
International	1,287		990		297
Total reported	1,287		990		297
% Change vs. 2Q22
U.S.	n/a		n/a		n/a
International	5.2		4.6		7.1
Total reported	5.2		4.6		7.1
Impact of foreign exchange	(7.4)		(8.4)		(4.4)
Organic	12.6		13.0		11.5
U.S.	n/a		n/a		n/a
International	12.6		13.0		11.5

Established Pharmaceuticals sales increased 5.2 percent on a reported basis and 12.6 percent on an organic basis in the second 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 4.6 percent on a reported basis and 13.0 percent on an organic basis, led by growth in several geographies and therapeutic areas, including gastroenterology, women's health, and central nervous system/pain management.

First Half 2023 Results (1H23)
Sales 1H23 ($ in millions)	Total		Key Emerging Markets		Other
U.S.	—		—		—
International	2,476		1,902		574
Total reported	2,476		1,902		574
% Change vs. 1H22
U.S.	n/a		n/a		n/a
International	4.4		2.7		10.8
Total reported	4.4		2.7		10.8
Impact of foreign exchange	(7.5)		(8.0)		(5.5)
Organic	11.9		10.7		16.3
U.S.	n/a		n/a		n/a
International	11.9		10.7		16.3

 

Medical Devices
Second Quarter 2023 Results (2Q23)
Sales 2Q23 ($ in millions)	Total		Rhythm Management		Electro- physiology		Heart Failure *		Vascular		Structural Heart		Neuro- modulation		Diabetes Care
U.S.	1,913		269		245		226		264		219		185		505
International	2,382		314		308		69		451		279		42		919
Total reported	4,295		583		553		295		715		498		227		1,424
% Change vs. 2Q22
U.S.	13.3		2.0		8.8		8.9		15.4		5.9		17.6		26.6
International	13.6		10.3		18.7		11.9		6.1		19.8		5.1		15.8
Total reported	13.5		6.3		14.1		9.6		9.3		13.3		15.1		19.4
Impact of foreign exchange	(1.9)		(1.9)		(2.8)		(0.3)		(2.3)		(1.5)		(1.1)		(2.0)
Impact of CSI acquisition	1.2		—		—		—		6.6		—		—		—
Organic	14.2		8.2		16.9		9.9		5.0		14.8		16.2		21.4
U.S.	11.0		2.0		8.8		8.9		(1.9)		5.9		17.6		26.6
International	16.8		14.0		23.9		13.2		8.7		22.6		10.5		18.8

Worldwide Medical Devices sales increased 13.5 percent on a reported basis and 14.2 percent on an organic basis in the second quarter. Sales growth was led by double-digit organic growth in Diabetes Care, Electrophysiology, Structural Heart and Neuromodulation. Several recently launched products and new indications contributed to the strong performance, including Amplatzer^® Amulet^®, Navitor^®, TriClip^®, and Aveir™_.

In Electrophysiology, internationally, sales grew high-teens on a reported basis and more than 20 percent on an organic basis, which includes high-teens growth in Europe.

In Diabetes Care, FreeStyle Libre sales were $1.3 billion, which represents sales growth of 22.9 percent on a reported basis and 24.7 percent on an organic basis.

First Half 2023 Results (1H23)
Sales 1H23 ($ in millions)	Total		Rhythm Management		Electro- physiology		Heart Failure *		Vascular		Structural Heart		Neuro- modulation		Diabetes Care
U.S.	3,691		529		483		444		482		429		340		984
International	4,504		581		575		132		850		530		83		1,753
Total reported	8,195		1,110		1,058		576		1,332		959		423		2,737
% Change vs. 1H22
U.S.	14.2		3.2		9.4		10.0		10.3		8.1		13.2		32.7
International	8.6		3.6		8.7		14.1		1.8		16.8		9.1		11.2
Total reported	11.0		3.4		9.0		10.9		4.7		12.8		12.4		18.1
Impact of foreign exchange	(2.9)		(2.8)		(3.8)		(0.8)		(3.1)		(2.7)		(1.4)		(3.1)
Impact of CSI acquisition	0.6		—		—		—		3.4		—		—		—
Organic	13.3		6.2		12.8		11.7		4.4		15.5		13.8		21.2
U.S.	12.9		3.2		9.4		10.0		1.3		8.1		13.2		32.7
International	13.7		8.9		15.7		17.4		6.1		22.0		16.1		15.8
*The Acelis Connected Health business was internally transferred from Rapid Diagnostics to Heart Failure on January 1, 2023. As a result, $28 million of sales in the second quarter of 2022 and $57 million in the first half of 2022 were moved from Rapid Diagnostics to Heart Failure.

 

ABBOTT'S EARNINGS-PER-SHARE GUIDANCE
Abbott projects full-year 2023 diluted earnings per share under GAAP of $3.02 to $3.22. Abbott forecasts specified items for the full-year 2023 of $1.28 per share primarily related to intangible amortization, costs associated with acquisitions, restructuring and cost reduction initiatives and other net expenses. Excluding specified items, projected adjusted diluted earnings per share would be $4.30 to $4.50 for the full-year 2023.

ABBOTT DECLARES 398^TH CONSECUTIVE QUARTERLY DIVIDEND
On June 9, 2023, the board of directors of Abbott declared the company's quarterly dividend of $0.51 per share. Abbott's cash dividend is payable August 15, 2023, to shareholders of record at the close of business on July 14, 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 second-quarter earnings conference call through its Investor Relations website at www.abbottinvestor.com at 8:30 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, 2022, 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	For the full-year 2022, COVID-19 testing-related sales were $8.368 billion and total worldwide sales were $43.653 billion.
2	Abbott has not provided the related 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.
3	Diagnostic sales and COVID-19 testing-related sales in 2023 and 2022 are summarized below:

 

	Sales 2Q23							COVID Tests Sales 2Q23
($ in millions)	U.S.		Int'l		Total			U.S.		Int'l		Total
Total Diagnostics	961		1,356		2,317			216		47		263
Core Laboratory	311		982		1,293			2		3		5
Molecular	43		98		141			4		4		8
Rapid Diagnostics	508		233		741			210		40		250
	Sales 2Q22							COVID Tests Sales 2Q22
($ in millions)	U.S.		Int'l		Total			U.S.		Int'l		Total
Total Diagnostics	2,441		1,853		4,294			1,732		592		2,324
Core Laboratory	287		934		1,221			3		9		12
Molecular	71		141		212			34		41		75
Rapid Diagnostics	1,982		740		2,722			1,695		542		2,237
	Sales 1H23							COVID Tests Sales 1H23
($ in millions)	U.S.		Int'l		Total			U.S.		Int'l		Total
Total Diagnostics	2,296		2,709		5,005			824		169		993
Core Laboratory	600		1,875		2,475			4		7		11
Molecular	90		198		288			14		14		28
Rapid Diagnostics	1,414		552		1,966			806		148		954
	Sales 1H22							COVID Tests Sales 1H22
($ in millions)	U.S.		Int'l		Total			U.S.		Int'l		Total
Total Diagnostics	5,153		4,398		9,551			3,719		1,908		5,628
Core Laboratory	555		1,850		2,405			8		32		40
Molecular	243		389		632			148		173		321
Rapid Diagnostics	4,163		2,084		6,247			3,563		1,703		5,267

 

Abbott Laboratories and Subsidiaries Condensed Consolidated Statement of Earnings Second Quarter Ended June 30, 2023 and 2022 (in millions, except per share data) (unaudited)
	2Q23		2Q22		% Change
Net Sales	$9,978		$11,257		(11.4)
Cost of products sold, excluding amortization expense	4,483		4,933		(9.1)
Amortization of intangible assets	498		507		(1.7)
Research and development	715		684		4.5
Selling, general, and administrative	2,740		2,757		(0.6)
Total Operating Cost and Expenses	8,436		8,881		(5.0)
Operating Earnings	1,542		2,376		(35.1)
Interest expense, net	61		106		(41.7)
Net foreign exchange (gain) loss	21		—		n/m
Other (income) expense, net	(176)		(82)		115.9
Earnings before taxes	1,636		2,352		(30.4)
Taxes on earnings	261		334		(22.0)	1)
Net Earnings	$1,375		$2,018		(31.8)
Net Earnings excluding Specified Items, as described below	$1,893		$2,542		(25.5)	2)
Diluted Earnings per Common Share	$0.78		$1.14		(31.6)
Diluted Earnings per Common Share, excluding Specified Items, as described below	$1.08		$1.43		(24.5)	2)
Average Number of Common Shares Outstanding Plus Dilutive Common Stock Options	1,750		1,765

 

NOTES:
See table titled "Non-GAAP Reconciliation of Financial Information" for an explanation of certain non-GAAP financial information.
n/m = Percent change is not meaningful.
See footnotes on the following below.
1)	2023 Taxes on Earnings includes the recognition of approximately $40 million of net tax expense as a result of the resolution of various tax positions related to prior years.
2)	2023 Net Earnings and Diluted Earnings per Common Share, excluding Specified Items, excludes net after-tax charges of $518 million, or $0.30 per share, for intangible amortization, charges related to restructuring and cost reduction initiatives, expenses associated with acquisitions and other net expenses.
	2022 Net Earnings and Diluted Earnings per Common Share, excluding Specified Items, excludes net after-tax charges of $524 million, or $0.29 per share, for intangible amortization, charges related to a voluntary recall and other net expenses primarily associated with acquisitions.

 

Abbott Laboratories and Subsidiaries Condensed Consolidated Statement of Earnings First Half Ended June 30, 2023 and 2022 (in millions, except per share data) (unaudited)
	1H23		1H22		% Change
Net Sales	$19,725		$23,152		(14.8)
Cost of products sold, excluding amortization expense	8,814		9,920		(11.2)
Amortization of intangible assets	989		1,019		(2.9)
Research and development	1,369		1,381		(0.9)
Selling, general, and administrative	5,502		5,544		(0.8)
Total Operating Cost and Expenses	16,674		17,864		(6.7)
Operating Earnings	3,051		5,288		(42.3)
Interest expense, net	113		223		(49.2)
Net foreign exchange (gain) loss	27		(3)		n/m
Other (income) expense, net	(287)		(160)		79.3
Earnings before taxes	3,198		5,228		(38.8)
Taxes on earnings	505		763		(33.8)	1)
Net Earnings	$2,693		$4,465		(39.7)
Net Earnings excluding Specified Items, as described below	$3,708		$5,619		(34.0)	2)
Diluted Earnings per Common Share	$1.53		$2.51		(39.0)
Diluted Earnings per Common Share, excluding Specified Items, as described below	$2.11		$3.16		(33.2)	2)
Average Number of Common Shares Outstanding Plus Dilutive Common Stock Options	1,751		1,770

 

NOTES:
See table titled "Non-GAAP Reconciliation of Financial Information" for an explanation of certain non-GAAP financial information.
n/m = Percent change is not meaningful.
See footnotes on the following below.
1)	2023 Taxes on Earnings includes the recognition of approximately $62 million of net tax expense as a result of the resolution of various tax positions related to prior years.
	2022 Taxes on Earnings includes the recognition of approximately $27 million of net tax expense as a result of the resolution of various tax positions related to prior years and approximately $32 million in excess tax benefits associated with share-based compensation.
2)	2023 Net Earnings and Diluted Earnings per Common Share, excluding Specified Items, excludes net after-tax charges of $1.015 billion, or $0.58 per share, for intangible amortization, charges related to restructuring and cost reduction initiatives, expenses associated with acquisitions and other net expenses.
	2022 Net Earnings and Diluted Earnings per Common Share, excluding Specified Items, excludes net after-tax charges of $1.154 billion, or $0.65 per share, for intangible amortization, charges related to a voluntary recall and other net expenses primarily associated with acquisitions.

 

Abbott Laboratories and Subsidiaries Non-GAAP Reconciliation of Financial Information Second Quarter Ended June 30, 2023 and 2022 (in millions, except per share data) (unaudited)
	2Q23
	As Reported (GAAP)		Specified Items		As Adjusted
Intangible Amortization	$            498		$          (498)		$              —
Gross Margin	4,997		529		5,526
R&D	715		(72)		643
SG&A	2,740		(22)		2,718
Other (income) expense, net	(176)		57		(119)
Earnings before taxes	1,636		566		2,202
Taxes on Earnings	261		48		309
Net Earnings	1,375		518		1,893
Diluted Earnings per Share	$           0.78		$           0.30		$           1.08

Specified items reflect intangible amortization expense of $498 million and other net expenses of $68 million associated with restructuring actions, costs associated with acquisitions and other net expenses. See table titled "Details of Specified Items" for additional details regarding specified items.

	2Q22
	As Reported (GAAP)		Specified Items		As Adjusted
Intangible Amortization	$            507		$          (507)		$              —
Gross Margin	5,817		563		6,380
R&D	684		(32)		652
SG&A	2,757		(14)		2,743
Other (income) expense, net	(82)		(12)		(94)
Earnings before taxes	2,352		621		2,973
Taxes on Earnings	334		97		431
Net Earnings	2,018		524		2,542
Diluted Earnings per Share	$           1.14		$           0.29		$           1.43

Specified items reflect intangible amortization expense of $507 million and other net expenses of $114 million that includes costs associated with a product recall, acquisitions, and other net expenses. See table titled "Details of Specified Items" for additional details regarding specified items.

Abbott Laboratories and Subsidiaries Non-GAAP Reconciliation of Financial Information First Half Ended June 30, 2023 and 2022 (in millions, except per share data) (unaudited)
	1H23
	As Reported (GAAP)		Specified Items		As Adjusted
Intangible Amortization	$            989		$          (989)		$              —
Gross Margin	9,922		1,049		10,971
R&D	1,369		(98)		1,271
SG&A	5,502		(24)		5,478
Other (income) expense, net	(287)		57		(230)
Earnings before taxes	3,198		1,114		4,312
Taxes on Earnings	505		99		604
Net Earnings	2,693		1,015		3,708
Diluted Earnings per Share	$           1.53		$           0.58		$           2.11

Specified items reflect intangible amortization expense of $989 million and other net expenses of $125 million associated with restructuring actions, costs associated with acquisitions and other expenses. See table titled "Details of Specified Items" for additional details regarding specified items.

	1H22
	As Reported (GAAP)		Specified Items		As Adjusted
Intangible Amortization	$         1,019		$       (1,019)		$              —
Gross Margin	12,213		1,199		13,412
R&D	1,381		(65)		1,316
SG&A	5,544		(53)		5,491
Other (income) expense, net	(160)		(27)		(187)
Earnings before taxes	5,228		1,344		6,572
Taxes on Earnings	763		190		953
Net Earnings	4,465		1,154		5,619
Diluted Earnings per Share	$           2.51		$           0.65		$           3.16

Specified items reflect intangible amortization expense of $1.019 billion and other net expenses of $325 million that includes costs associated with a product recall, acquisitions, and other net expenses. See table titled "Details of Specified Items" for additional details regarding specified items.

A reconciliation of the second-quarter tax rates for 2023 and 2022 is shown below:

	2Q23
($ in millions)	Pre-Tax Income		Taxes on Earnings		Tax Rate
As reported (GAAP)	$         1,636		$            261		15.9 %	1)
Specified items	566		48
Excluding specified items	$         2,202		$            309		14.0 %
	2Q22
($ in millions)	Pre-Tax Income		Taxes on Earnings		Tax Rate
As reported (GAAP)	$         2,352		$            334		14.2 %
Specified items	621		97
Excluding specified items	$         2,973		$            431		14.5 %

 

1)	2023 Taxes on Earnings includes the recognition of approximately $40 million of net tax expense as a result of the resolution of various tax positions related to prior years.

A reconciliation of the year-to-date tax rates for 2023 and 2022 is shown below:
	1H23
($ in millions)	Pre-Tax Income		Taxes on Earnings		Tax Rate
As reported (GAAP)	$         3,198		$            505		15.8 %	2)
Specified items	1,114		99
Excluding specified items	$         4,312		$            604		14.0 %
	1H22
($ in millions)	Pre-Tax Income		Taxes on Earnings		Tax Rate
As reported (GAAP)	$         5,228		$            763		14.6 %	3)
Specified items	1,344		190
Excluding specified items	$         6,572		$            953		14.5 %

 

2)	2023 Taxes on Earnings includes the recognition of approximately $62 million of net tax expense as a result of the resolution of various tax positions related to prior years.
3)	2022 Taxes on Earnings includes the recognition of approximately $27 million of net tax expense as a result of the resolution of various tax positions related to prior years and approximately $32 million in excess tax benefits associated with share-based compensation.

 

Abbott Laboratories and Subsidiaries Non-GAAP Revenue Reconciliation Second Quarter and First Half Ended June 30, 2023 and 2022 ($ in millions) (unaudited)
			2Q23										2Q22						% Change vs. 2Q22
																							Non-GAAP
			Abbott Reported		Impact of CSI acquisition (a)		Impact from business exit (b)	Adjusted Revenue					Abbott Reported	Impact from business exit (b)		Adjusted Revenue			Reported				Adjusted		Organic
Total Company			9,978		(43)		(29)	9,906					11,257	(39)		11,218			(11.4)				(11.7)		(9.2)
U.S.			3,758		(39)		—	3,719					4,892	—		4,892			(23.2)				(24.0)		(24.0)
Intl			6,220		(4)		(29)	6,187					6,365	(39)		6,326			(2.3)				(2.2)		2.2
Total Nutrition			2,076		—		(29)	2,047					1,953	(39)		1,914			6.3				6.9		9.9
U.S.			881		—		—	881					761	—		761			15.7				15.7		15.7
Intl			1,195		—		(29)	1,166					1,192	(39)		1,153			0.3				1.2		6.1
Pediatric Nutrition			1,024		—		(29)	995					925	(39)		886			10.6				12.2		14.5
U.S.			507		—		—	507					413	—		413			22.5				22.5		22.5
Intl			517		—		(29)	488					512	(39)		473			1.1				3.3		7.5
Total Medical Devices			4,295		(43)		—	4,252					3,785	—		3,785			13.5				12.3		14.2
U.S.			1,913		(39)		—	1,874					1,688	—		1,688			13.3				11.0		11.0
Intl			2,382		(4)		—	2,378					2,097	—		2,097			13.6				13.4		16.8
Vascular			715		(43)		—	672					653	—		653			9.3				2.7		5.0
U.S.			264		(39)		—	225					228	—		228			15.4				(1.9)		(1.9)
Intl			451		(4)		—	447					425	—		425			6.1				5.2		8.7

		1H23										1H22									% Change vs. 1H22
																								Non-GAAP
		Abbott Reported		Impact of CSI acquisition (a)		Impact from business exit (b)			Adjusted Revenue			Abbott Reported			Impact from business exit(b)		Adjusted Revenue				Reported			Adjusted		Organic
Total Company		19,725		(43)		(37)			19,645			23,152			(91)		23,061				(14.8)			(14.8)		(11.9)
U.S.		7,686		(39)		—			7,647			9,829			—		9,829				(21.8)			(22.2)		(22.2)
Intl		12,039		(4)		(37)			11,998			13,323			(91)		13,232				(9.6)			(9.3)		(4.3)
Total Nutrition		4,043		—		(37)			4,006			3,847			(91)		3,756				5.1			6.7		10.1
U.S.		1,693		—		—			1,693			1,438			—		1,438				17.7			17.7		17.7
Intl		2,350		—		(37)			2,313			2,409			(91)		2,318				(2.4)			(0.1)		5.4
Pediatric Nutrition		1,948		—		(37)			1,911			1,772			(91)		1,681				9.9			13.7		16.3
U.S.		966		—		—			966			751			—		751				28.6			28.6		28.6
Intl		982		—		(37)			945			1,021			(91)		930				(3.8)			1.8		6.4
Total Medical Devices		8,195		(43)		—			8,152			7,379			—		7,379				11.0			10.4		13.3
U.S.		3,691		(39)		—			3,652			3,233			—		3,233				14.2			12.9		12.9
Intl		4,504		(4)		—			4,500			4,146			—		4,146				8.6			8.5		13.7
Vascular		1,332		(43)		—			1,289			1,272			—		1,272				4.7			1.3		4.4
U.S.		482		(39)		—			443			437			—		437				10.3			1.3		1.3
Intl		850		(4)		—			846			835			—		835				1.8			1.3		6.1
(a) Reflects the impact of the acquisition of Cardiovascular  Systems, Inc. (CSI) on April 27, 2023.
(b) Reflects the impact of exiting the pediatric nutrition business in China. This action was initiated in December 2022.

 

Abbott Laboratories and Subsidiaries Details of Specified Items Second Quarter Ended June 30, 2023 (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	$                    7		$                  11		$                498		$                  13		$                529
R&D	(8)		7		—		(71)		(72)
SG&A	(17)		(2)		—		(3)		(22)
Other (income) expense, net	47		—		—		10		57
Earnings before taxes	$                (15)		$                    6		$                498		$                  77		566
Taxes on Earnings (d)									48
Net Earnings									$                518
Diluted Earnings per Share									$               0.30

The table above provides additional details regarding the specified items described on tables titled "Non-GAAP Reconciliation of Financial Information."
a)	Acquisition-related expenses include legal and other costs related to business acquisitions as well as integration costs, which represent incremental costs directly related to integrating acquired businesses. These costs were more than offset by fair value adjustments to contingent consideration related to business acquisitions.
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 and charges for intangible asset impairments.
d)	Reflects the net tax benefit associated with the specified items and tax expense as a result of the resolution of various tax positions related to prior years.

 

Abbott Laboratories and Subsidiaries Details of Specified Items Second Quarter Ended June 30, 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	$                  20		$                  (6)		$                507		$                  42		$                563
R&D	(5)		—		—		(27)		(32)
SG&A	(7)		—		—		(7)		(14)
Other (income) expense, net	(4)		—		—		(8)		(12)
Earnings before taxes	$                  36		$                  (6)		$                507		$                  84		621
Taxes on Earnings (d)									97
Net Earnings									$                524
Diluted Earnings per Share									$               0.29

The table above provides additional details regarding the specified items described on tables titled "Non-GAAP Reconciliation of Financial Information."
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 includes costs related to a voluntary recall within the Nutrition segment and incremental costs to comply with the MDR and IVDR regulations 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 First Half Ended June 30, 2023 (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	$                  12		$                  32		$                989		$                  16		$             1,049
R&D	(12)		8		—		(94)		(98)
SG&A	(21)		(6)		—		3		(24)
Other (income) expense, net	41		—		—		16		57
Earnings before taxes	$                    4		$                  30		$                989		$                  91		1,114
Taxes on Earnings (d)									99
Net Earnings									$             1,015
Diluted Earnings per Share									$               0.58

The table above provides additional details regarding the specified items described on tables titled "Non-GAAP Reconciliation of Financial Information."
a)	Acquisition-related expenses include legal and other costs related to business acquisitions as well as integration costs, which represent incremental costs directly related to integrating acquired businesses. These costs were partially offset by fair value adjustments to contingent consideration related to business acquisitions.
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 MDR and IVDR regulations for previously approved products and charges for intangible asset impairments.
d)	Reflects the net tax benefit associated with the specified items and tax expense as a result of the resolution of various tax positions related to prior years.

 

Abbott Laboratories and Subsidiaries Details of Specified Items First Half Ended June 30, 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	$                  41		$                (12)		$             1,019		$                151		$             1,199
R&D	(7)		(1)		—		(57)		(65)
SG&A	(18)		—		—		(35)		(53)
Other (income) expense, net	(11)		—		—		(16)		(27)
Earnings before taxes	$                  77		$                (11)		$             1,019		$                259		1,344
Taxes on Earnings (d)									190
Net Earnings									$             1,154
Diluted Earnings per Share									$               0.65

The table above provides additional details regarding the specified items described on tables titled "Non-GAAP Reconciliation of Financial Information."
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 includes charges related to a voluntary recall within the Nutrition segment and incremental costs to comply with the MDR and IVDR regulations for previously approved products.
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.

 

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SOURCE Abbott

FAQ

What were the second-quarter sales for Abbott?

Abbott reported sales of $10.0 billion in the second quarter.

What was the organic sales growth in the underlying base business?

The organic sales growth in the underlying base business was 11.5 percent.

What is the projected full-year 2023 organic sales growth?

Abbott projects full-year 2023 organic sales growth in the low double-digits.

What new products did Abbott receive approvals for?

Abbott received FDA approval for its TactiFlex Ablation Catheter, Sensor Enabled, and its AVEIR dual chamber leadless pacemaker system.

What is the impact of COVID-19 testing sales on Abbott's overall sales?

The impact of COVID-19 testing sales on Abbott's overall sales is -51.8 percent.