Abbott Q1 Diagnostics Revenues Flat

Abbott said Wednesday that its first quarter Diagnostics business revenues grew about 2 percent year over year, driven by long-term double-digit growth in its Alinity molecular diagnostic platform and other products.
 
For the three months ended March 31, Abbott reported overall Q1 revenues of $7.53 billion, up nearly 2 percent from $7.39 billion in Q1 of 2018 and beating the analysts' average estimate of $7.47 billion.
 
On an organic basis, revenues grew 7 percent year over year.
 
The firm reported its Diagnostics revenues remained flat year over year at $1.84 billion. Within Diagnostics, core laboratory revenues were $1.06 billion, up about 4 percent year over year from $1.02 billion. Meanwhile, its molecular diagnostics revenues slid 8 percent to $108 million from $118 million in Q1 2018. Point-of-care revenues were down nearly 5 percent to $135 million from $141 million, and rapid diagnostic revenues, comprising Alere, which Abbott bought in late 2017, decreased 4 percent to $537 million from $559 million.
 
Company highlights for Q1 included receipt of CE marking for its Determine HBsAg2 rapid diagnostic assay. In addition, the US Food and Drug Administration granted the firm a CLIA waiver for use of its BinaxNOW Influenza A & B Card 2 assay.
 
"All of our key long-term growth drivers are performing well and we're targeting another year of strong sales and earnings growth," Abbott CEO Miles White said in a statement. In a conference call with investors following the release of Abbott's results, he noted that "Alinity is driving strong growth internationally, and we continue to achieve above-market growth in the US."
 
Aiming to expand the Alinity platform, White said that Abbott expects to offer a full menu in the US by the end of 2019 and that customers will see a "measurable impact from [Alinity] in 2020." Abbott noted that it previously received CE marking for the Alinity molecular diagnostics platform in March. In addition, the firm partnered with Regional Medical Laboratory in Tulsa, Oklahoma to use the Alinity i immunoassay system in the face of growing test volumes and a shortage of trained labor.
 
In other business segments, Abbott's Q1 Nutrition revenues grew about 2 percent to $1.79 billion from $1.76 billion; Established Pharmaceuticals revenues fell nearly 5 percent to $992 million from $1.00 billion; and Medical Devices revenues rose about 6 percent to $2.9 billion from $2.75 billion.  
 
Abbott reported net earnings of $672 million, or $.38 per share, in Q1 compared to $418 million, or $.23 per share, in the year-ago period. Adjusted EPS was $.63, beating the analysts' consensus estimate of $0.61.
 
The firm spent $672 million on R&D in Q1, up 14 percent from $589 million in Q1 2018, and logged $2.48 billion in SG&A expenses, down about 3 percent from $2.54 billion in the prior-year quarter.
 
Abbott projected 2019 EPS from continuing operations of $1.95 to $2.05, while adjusted EPS is expected to be in the range of $3.15 to $3.25.
 
It projected second quarter EPS from continuing operations of $.47 to $.49. It estimated adjusted EPS to be in the range of $0.79 to $0.81 for the second quarter.
 
In Wednesday morning trading on the New York Stock Exchange, shares of Abbott were down more than 1 percent at $76.38.