• 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 398TH 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.

 

Cision View original content:https://www.prnewswire.com/news-releases/abbott-reports-second-quarter-2023-results-increases-outlook-for-underlying-base-business-301882027.html

SOURCE Abbott

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