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UPDATE 2-Abbott profit beats on strong sales of medical devices, diagnostics

Reuters
·2-min read

(Adds shares in paragraph 8, background in paragraphs 4 and 7, details on diagnostics sales in paragraph 9)

Oct 18 (Reuters) - Abbott Laboratories on Wednesday tightened its profit forecast for the year after beating estimates for third-quarter earnings on strong demand for its medical devices and diagnostics products.

The company is seeing a recovery in sales of its medical devices such as heart valves and pacemakers as more people, especially older patients, opt for surgeries that were put off during the pandemic.

The results also corroborate health insurer UnitedHealth's statement

last week

that levels of elective surgery had nearly stabilized in the latest three-month period, compared with the second quarter, and were higher among older adults.

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Abbott's quarterly sales of its medical devices rose nearly 17% to $4.25 billion, beating analysts' estimates of $4.16 billion.

Its continuous-glucose-monitoring (CGM) device, Freestyle Libre, brought in sales of about $1.4 billion, compared with $1.3 billion in the second quarter, and accounted for nearly 14% of its revenue.

Sales of CGM devices, however, are expected to come under pressure, with the growing popularity of new diabetes drugs such as Novo Nordisk's Ozempic and Eli Lilly's Mounjaro.

Abbott has tried to allay those concerns by saying it could be a "complementary relationship". It published a study last month showing how the sales of FreeStyle Libre tracked the growth in the use of GLP-1 therapies, to which the new drugs belong.

Shares of the company were up 2.4% in premarket trade.

Sales of its diagnostic devices and kits were $2.45 billion, down by nearly a third due to a sharp fall in COVID-19 testing-related sales. Excluding the impact, it would have risen 10.1% on an organic basis, the company said.

On an adjusted basis, the company now expects annual profit of $4.42 to $4.46 per share, compared with its previous forecast of $4.30-$4.50 per share.

Excluding items, Abbott earned $1.14 per share, above analysts' estimates of $1.10 per share, according to LSEG data. (Reporting by Pratik Jain and Leroy Leo in Bengaluru; Editing by Anil D'Silva)