Abbott Labs (ABT, Financial) witnessed a decline of 3% in its stock following the announcement of its first-quarter results. This trend mirrors the reaction to Johnson & Johnson's (JNJ, Financial) report, with Abbott showcasing a decent EPS upside after a consistent Q4 performance. The company reported a revenue increase of 2.2% year-over-year to $9.96 billion, slightly surpassing analyst expectations. However, the forecasted mid-point for Q2 EPS fell short of consensus, a common conservative approach by ABT.
Key highlights from Abbott's quarterly performance include:
- Medical Devices, the largest segment, saw sales jump by 14.2% year-over-year to $4.45 billion. This growth was primarily driven by Diabetes Care, Electrophysiology, Neuromodulation, and Structural Heart, with significant contributions from newly launched products such as Amplatzer Amulet, Navitor, TriClip, and AVEIR. Notably, FreeStyle Libre sales in Diabetes Care surged by 22.4% to $1.5 billion.
- The Nutrition segment also showed robust performance, with a 5.1% increase in sales to $2.07 billion. Pediatric Nutrition led this growth, climbing 9.2%, including a 12% rise in the US market, largely due to infant formula market share gains. Adult Nutrition saw a modest increase of 1.5%, propelled by Ensure sales.
- The Diagnostics segment, however, faced a downturn with a 17.6% drop in sales to $2.21 billion, primarily due to a significant fall in COVID-19 testing-related sales. Excluding these sales, Diagnostics still managed a 2.7% increase, with the Alinity family of diagnostics systems continuing to gain traction.
- Established Pharmaceuticals, the smallest segment, experienced a 3.1% year-over-year sales increase to $1.23 billion, focusing on international markets, especially in emerging countries. Organic growth for this segment, excluding foreign exchange impacts, was up by 13.7%.
Despite these detailed segment performances, investor sentiment towards Abbott Labs appears to be cautious, reflecting a similar response to JNJ's recent report. The combination of a modest Q1 performance and uninspiring Q2 EPS guidance has contributed to the stock's recent downward trend. It seems that pre-report investor caution was justified, as the market's reaction this morning was less than favorable.
