Abbott Q4 Diagnostic Revenues Grow 3 Percent

Abbott said Wednesday that its fourth quarter diagnostic revenues grew 3 percent year over year on a reported basis and 7 percent on an organic basis to $1.96 billion from $1.91 billion in the year-ago period.
 
For the three months ended Dec. 31, 2018, Abbott reported worldwide revenues of $7.77 billion, up 2 percent from $7.59 billion a year ago, but lower than the average Wall Street estimate of $7.82 billion. Sales increased 6 percent year over year on an organic basis.
 
Overall 2018 organic sales growth excluded the prior-year results for the Abbott Medical Optics and St. Jude Medical vascular closure businesses, which were divested during the first quarter of 2017. Further, it excluded the current and prior-year results for Rapid Diagnostics, which reflect results for Alere, which Abbott acquired in October 2017. Organic sales growth excluded the impact of foreign exchange and the prior-year fourth quarter results for a non-core business within US Adult Nutrition, which was discontinued during the third quarter of 2018.
 
Within its Diagnostics business segment, Abbott reported molecular diagnostics revenues of $123 million, up 1 percent from $122 million in Q4 2017. Organic MDx revenue growth was 4 percent, Abbott said. Molecular diagnostics worldwide sales in the quarter were led by growth in infectious disease testing.
 
Core laboratory revenues were $1.15 billion, up 5 percent from $1.1 billion in Q4 2017 and up 9 percent organically.
 
Point-of-care revenues were $137 million, down 6 percent from $145 million in the prior-year period and down 5 percent organically. Alere rapid diagnostics revenues were $548 million in the quarter, up 1 percent from $540 million in Q4 2017 and driven by infectious disease and cardiometabolic testing.
 
Abbott CEO Miles White said in a conference call to discuss the company's financial performance that this past year was particularly important for its diagnostics business as it accelerated the launch of its Alinity family of integrated instruments and tests in Europe and other international markets.
 
"In 2019 while the international launch continues to gain momentum, we anticipate obtaining US regulatory approvals for a critical mass of our test menu… which will allow us to accelerate the launch of Alinity in the US later this year," White said.
 
He added that 2018 was an important year for its newly formed rapid diagnostics as "we also made important advancements in our pipeline with new product launches in the areas of diabetes and cardiac care, as well as molecular rapid tests for infectious diseases. These new products, along with continued focus on strong execution across our portfolio, will drive accelerated growth for this business going forward."
 
Since the acquisition of Alere, Abbott has reorganized the rapid diagnostics business into four segments, each of which has its own emphasis, sales target, and R&D and new product plans, White said. He highlighted the Afinion 2 cardiometabolic analyzer and the ID Now infectious disease platform as current rapid diagnostics systems with potential to drive growth.
 
In other business segments, Abbott's Q4 Nutrition revenues were flat year over year at $1.78 billion; Established Pharmaceuticals revenues were down 4 percent to $1.10 billion from $1.15 billion; and Medical Devices revenues grew 7 percent to $2.92 billion from $2.74 billion.
 
Abbott's Q4 R&D expenses dropped 9 percent year over year to $562 million from $619 million while its SG&A expenses fell 5 percent to $2.36 billion from $2.48 billion.
 
The firm reported Q4 net income of $654 million, or $.37 per share, compared to a loss of $828 million, or $.48 per share, in Q4 2017. Its adjusted EPS from continuing operations was $.81 per share, matching the analysts' average consensus estimate.
 
For full-year 2018, the firm reported worldwide revenues of $30.58 billion, up 12 percent from $27.39 billion a year ago, but lower than the average Wall Street estimate of $30.65 billion.
 
Abbott reported $7.50 billion in diagnostics revenues in 2018, up 34 percent from $5.62 billion in the year-ago period and up 7 percent on an organic basis.
 
Within Diagnostics for 2018, molecular diagnostics revenues totaled $484 million, up 5 percent from $463 million in 2017. Core laboratory revenues were $4.39 billion, up 8 percent from $4.06 billion in 2017. Point-of-care revenues were flat year over year at $553 million, and rapid diagnostics revenues were $2.07 billion during the first full year that Abbott reported revenues for that business.
 
In other business units, 2018 Nutrition revenues rose 4 percent year over year to $7.23 billion from $6.93 billion; Established Pharmaceuticals revenues rose 3 percent to $4.42 billion from $4.29 billion; and Medical Devices revenues grew 10 percent to $11.37 billion from $10.33 billion.
 
Abbott's 2018 R&D expenses dropped 2 percent to $2.30 billion from $2.26 billion while its SG&A expenses rose 6 percent to $9.75 billion from $9.18 billion.
 
The company reported 2018 net income of $2.37 billion, or $1.33 per share, compared to $477 million, or $.27 per share, in 2017. The firm's 2018 adjusted EPS from continuing operations, was $2.88 per share, matching the analysts' average consensus estimate.
 
Abbott said that on an adjusted basis, it anticipates projected full-year 2019 earnings per share from continuing operations will be between $3.15 and $3.25.
 
The firm issued Q1 2019 EPS guidance from continuing operations of $0.25 to $0.27. Adjusted EPS from continuing operations for Q1 2019 is anticipated to be between $0.60 and $0.62.
 
For full-year 2019, Abbott said organic sales growth is expected in the range of 6.5 to 7.5 percent. EPS from continuing operations is forecast at $1.80 to $1.90. Adjusted EPS from continuing operations for 2019 is expected to be in the range of $3.15 to $3.25.
 
In early morning trade on the New York Stock Exchange, Abbott shares were down more than 2 percent at $70.03.