• Sales of $10.1 billion driven by strong underlying base business performance
  • Reported sales decreased 2.6 percent due to anticipated decline in COVID-19 testing-related sales versus prior year
  • Organic sales growth for underlying base business of 13.8 percent, reflects double-digit growth in each of the four major businesses

ABBOTT PARK, Ill., Oct. 18, 2023 /PRNewswire/ -- Abbott (NYSE: ABT) today announced financial results for the third quarter ended Sept. 30, 2023.

  • Third-quarter GAAP diluted EPS of $0.82 and adjusted diluted EPS of $1.14, which excludes specified items.
  • Abbott narrowed its full-year 2023 EPS guidance range. Abbott projects full-year diluted EPS on a GAAP basis of $3.14 to $3.18 and projects adjusted diluted EPS of $4.42 to $4.46, which represents an increase at the midpoint of the guidance range.
  • Abbott continues to project full-year 2023 organic sales growth, excluding COVID-19 testing-related sales1, to be in the low double-digits2.
  • In July, Abbott obtained CE Mark for its AVEIR single-chamber leadless pacemaker for treating patients with slow heart rhythms. Unlike traditional pacemakers, leadless pacemakers do not require an incision in the chest to implant or leads (wires) to deliver therapy.
  • In September, Abbott acquired Bigfoot Biomedical, a leader in developing insulin management systems, furthering Abbott's efforts to develop connected solutions for making diabetes management even more personal and precise.
  • In September, Abbott expanded its existing collaboration with global biotech leader mAbxience Holdings S.L. to commercialize several biosimilar molecules, with the goal of broadening access to these therapies for people in emerging markets.
  • In September, Abbott published an analysis showing a complementary relationship between the company's FreeStyle Libre® continuous glucose monitoring system and GLP-1 medications. The analysis also showed that a growing number of people are using these tools together to support behavior change to optimize the treatment of diabetes and improve overall health.

"The investments we made during the pandemic continue to drive broad-based growth across our underlying base business," said Robert B. Ford, chairman and chief executive officer, Abbott. "We're on track to deliver on the financial commitments we set at the beginning of the year, and the momentum we're building across the portfolio positions us well as we head into 2024."

THIRD-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. 

Third Quarter 2023 Results (3Q23)


Sales 3Q23 ($ in millions)

Total Company


Nutrition


Diagnostics


Established

Pharmaceuticals


Medical Devices

U.S.

3,817


860


1,013



1,940

International

6,326


1,213


1,436


1,368


2,309

Total reported

10,143


2,073


2,449


1,368


4,249











% Change vs. 3Q22










U.S.

(6.8)


25.4


(40.8)


n/a


14.6

International

0.2


9.3


(25.6)


3.2


18.4

Total reported

(2.6)


15.5


(32.7)


3.2


16.6

Impact of foreign exchange

(1.4)


(1.4)


(0.8)


(7.9)


0.6

Impact of CSI acquisition

0.5





1.3

Impact of business exit

(0.2)


(1.2)




Organic

(1.5)


18.1


(31.9)


11.1


14.7

Impact of COVID-19 testing sales (3)

(15.3)



(42.0)



Organic (excluding COVID-19 tests)

13.8


18.1


10.1


11.1


14.7











    U.S.

15.3


25.4


13.7


n/a


11.8

    International

13.0


13.4


8.2


11.1


17.1

 

First Nine Months 2023 Results (9M23)


Sales 9M23 ($ in millions)

Total Company


Nutrition


Diagnostics


Established

Pharmaceuticals


Medical Devices

U.S.

11,503


2,553


3,309



5,631

International

18,365


3,563


4,145


3,844


6,813

Total reported

29,868


6,116


7,454


3,844


12,444











% Change vs. 9M22










U.S.

(17.4)


20.2


(51.8)


n/a


14.3

International

(6.5)


1.3


(34.5)


4.0


11.8

Total reported

(11.0)


8.4


(43.5)


4.0


12.9

Impact of foreign exchange

(2.4)


(2.8)


(1.4)


(7.6)


(1.7)

Impact of CSI acquisition

0.3





0.8

Impact of business exit

(0.2)


(1.5)




Organic

(8.7)


12.7


(42.1)


11.6


13.8

Impact of COVID-19 testing sales (3)

(20.5)



(49.3)



Organic (excluding COVID-19 tests)

11.8


12.7


7.2


11.6


13.8











    U.S.

12.9


20.2


6.3


n/a


12.6

    International

11.2


8.0


7.7


11.6


14.8

 

Refer to table titled "Non-GAAP Revenue Reconciliation" for a reconciliation of adjusted historical revenue to reported revenue.

Nutrition


Third Quarter 2023 Results (3Q23)


Sales 3Q23 ($ in millions)























Total


Pediatric


Adult

U.S.























860


506


354

International























1,213


495


718

Total reported























2,073


1,001


1,072





























% Change vs. 3Q22




























U.S.























25.4


41.8


7.7

International























9.3


5.1


12.4

Total reported























15.5


20.9


10.8

Impact of foreign exchange























(1.4)


(1.4)


(1.6)

Impact of business exit























(1.2)


(2.6)


Organic























18.1


24.9


12.4





























    U.S.























25.4


41.8


7.7

    International























13.4


11.5


14.8

 

Worldwide Nutrition sales increased 15.5 percent on a reported basis and 18.1 percent on an organic basis in the third quarter. Refer to table titled "Non-GAAP Revenue Reconciliation" for a reconciliation of adjusted historical revenue to reported revenue.

In Pediatric Nutrition, global sales increased 20.9 percent on a reported basis and 24.9 percent on an organic basis. In the U.S., sales growth of 41.8 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 10.8 percent on a reported basis and 12.4 percent on an organic basis, which was led by strong global growth of Ensure®, Abbott's market-leading complete and balanced nutrition brand. 

First Nine Months 2023 Results (9M23)


Sales 9M23 ($ in millions)














Total


Pediatric


Adult

U.S.














2,553


1,472


1,081

International














3,563


1,477


2,086

Total reported














6,116


2,949


3,167




















% Change vs. 9M22



















U.S.














20.2


32.8


6.4

International














1.3


(0.9)


2.9

Total reported














8.4


13.5


4.1

Impact of foreign exchange














(2.8)


(2.1)


(3.3)

Impact of business exit














(1.5)


(3.5)


Organic














12.7


19.1


7.4




















    U.S.














20.2


32.8


6.4

    International














8.0


8.1


7.9

 

Diagnostics


Third Quarter 2023 Results (3Q23)


Sales 3Q23 ($ in millions)

Total


Core Laboratory


Molecular


Point of Care


Rapid

Diagnostics *

U.S.

1,013


317


38


97


561

International

1,436


997


95


43


301

Total reported

2,449


1,314


133


140


862











% Change vs. 3Q22










U.S.

(40.8)


12.7


(42.0)


5.7


(55.9)

International

(25.6)


6.3


(19.9)


21.8


(64.1)

Total reported

(32.7)


7.8


(27.8)


10.2


(59.2)

Impact of foreign exchange

(0.8)


(1.9)


(0.3)


0.4


(0.3)

Organic

(31.9)


9.7


(27.5)


9.8


(58.9)

Impact of COVID-19 testing sales (3)

(42.0)


(0.7)


(23.9)



(72.0)

Organic (excluding COVID-19 tests)

10.1


10.4


(3.6)


9.8


13.1











    U.S.

13.7


13.4


(15.9)


5.7


20.1

    International

8.2


9.5


1.7


20.4


2.9

 

As expected, Diagnostics sales growth in the third quarter was negatively impacted by year-over-year declines in COVID-19 testing-related sales3. Worldwide COVID-19 testing sales were $305 million in the third quarter of 2023 compared to $1.671 billion in the third quarter of the prior year.

Excluding COVID-19 testing-related sales, global Diagnostics sales increased 8.8 percent on a reported basis and 10.1 percent on an organic basis. 

First Nine Months 2023 Results (9M23)


Sales 9M23 ($ in millions)

Total


Core Laboratory


Molecular


Point of Care


Rapid

Diagnostics *

U.S.

3,309


917


128


289


1,975

International

4,145


2,872


293


127


853

Total reported

7,454


3,789


421


416


2,828











% Change vs. 9M22










U.S.

(51.8)


9.7


(58.7)


1.9


(63.7)

International

(34.5)


3.0


(42.2)


14.6


(70.8)

Total reported

(43.5)


4.6


(48.4)


5.5


(66.2)

Impact of foreign exchange

(1.4)


(3.5)


(0.9)


(0.4)


(0.6)

Organic

(42.1)


8.1


(47.5)


5.9


(65.6)

Impact of COVID-19 testing sales (3)

(49.3)


(1.1)


(36.2)



(73.8)

Organic (excluding COVID-19 tests)

7.2


9.2


(11.3)


5.9


8.2











    U.S.

6.3


10.6


(19.5)


1.9


7.7

    International

7.7


8.8


(7.7)


16.0


9.0


*The Acelis Connected Health business was internally transferred from Rapid Diagnostics to Heart Failure on January 1, 2023. As a result, $30 million of sales in the third quarter of 2022 and $87 million in the first nine months of 2022 were moved from Rapid Diagnostics to Heart Failure.

 

Established Pharmaceuticals


Third Quarter 2023 Results (3Q23)


Sales 3Q23 ($ in millions)

















Total


Key Emerging

Markets


Other

U.S.



















International

















1,368


987


381

Total reported

















1,368


987


381























% Change vs. 3Q22






















U.S.

















n/a


n/a


n/a

International

















3.2


(1.4)


17.2

Total reported

















3.2


(1.4)


17.2

Impact of foreign exchange

















(7.9)


(10.2)


(1.2)

Organic

















11.1


8.8


18.4























    U.S.

















n/a


n/a


n/a

    International

















11.1


8.8


18.4

 

Established Pharmaceuticals sales increased 3.2 percent on a reported basis and 11.1 percent on an organic basis in the third 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 decreased 1.4 percent on a reported basis and increased 8.8 percent on an organic basis, led by growth in several geographies and therapeutic areas, including cardiometabolic, women's health, and central nervous system/pain management.

 

First Nine Months 2023 Results (9M23)


Sales 9M23 ($ in millions)



















Total


Key Emerging

Markets


Other

U.S.





















International



















3,844


2,889


955

Total reported



















3,844


2,889


955

























% Change vs. 9M22
























U.S.



















n/a


n/a


n/a

International



















4.0


1.3


13.2

Total reported



















4.0


1.3


13.2

Impact of foreign exchange



















(7.6)


(8.7)


(3.9)

Organic



















11.6


10.0


17.1

























    U.S.



















n/a


n/a


n/a

    International



















11.6


10.0


17.1

 

Medical Devices


Third Quarter 2023 Results (3Q23)


Sales 3Q23 ($ in millions)

Total


Rhythm

Management


Electro-

physiology


Heart

Failure *


Vascular


Structural

Heart


Neuro-

modulation


Diabetes

Care

U.S.

1,940


271


246


217


251


223


188


544

International

2,309


292


298


67


421


264


39


928

Total reported

4,249


563


544


284


672


487


227


1,472

















% Change vs. 3Q22
















U.S.

14.6


3.7


9.1


5.0


17.5


7.6


20.9


28.5

International

18.4


8.2


22.5


30.9


7.3


23.8


7.4


24.8

Total reported

16.6


6.0


16.0


10.2


10.9


15.8


18.3


26.2

Impact of foreign exchange

0.6


0.2


(0.8)


1.0


0.2


1.1


(0.5)


1.7

Impact of CSI acquisition

1.3





7.9




Organic

14.7


5.8


16.8


9.2


2.8


14.7


18.8


24.5

















    U.S.

11.8


3.7


9.1


5.0


(4.1)


7.6


20.9


28.5

    International

17.1


7.8


24.0


26.3


6.5


21.6


9.9


22.3

 

Worldwide Medical Devices sales increased 16.6 percent on a reported basis and 14.7 percent on an organic basis in the third 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 more than 20 percent on a reported and organic basis, which includes mid-teens growth in Europe.

In Diabetes Care, FreeStyle Libre sales were $1.4 billion, which represents sales growth of 30.5 percent on a reported basis and 28.5 percent on an organic basis. 

First Nine Months 2023 Results (9M23)


Sales 9M23 ($ in millions)

Total


Rhythm

Management


Electro-

physiology


Heart

Failure *


Vascular


Structural

Heart


Neuro-

modulation


Diabetes

Care

U.S.

5,631


800


729


661


733


652


528


1,528

International

6,813


873


873


199


1,271


794


122


2,681

Total reported

12,444


1,673


1,602


860


2,004


1,446


650


4,209

















% Change vs. 9M22
















U.S.

14.3


3.4


9.3


8.3


12.7


7.9


15.8


31.1

International

11.8


5.1


13.0


19.2


3.5


19.1


8.5


15.6

Total reported

12.9


4.3


11.3


10.7


6.7


13.8


14.4


20.8

Impact of foreign exchange

(1.7)


(1.7)


(2.8)


(0.2)


(2.1)


(1.5)


(1.1)


(1.5)

Impact of CSI acquisition

0.8





4.9




Organic

13.8


6.0


14.1


10.9


3.9


15.3


15.5


22.3

















    U.S.

12.6


3.4


9.3


8.3


(0.5)


7.9


15.8


31.1

    International

14.8


8.6


18.3


20.1


6.2


21.9


14.1


17.9


*The Acelis Connected Health business was internally transferred from Rapid Diagnostics to Heart Failure on January 1, 2023. As a result, $30 million of sales in the third quarter of 2022 and $87 million in the first nine months 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 $3.14 to $3.18. 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 $4.42 to $4.46 for the full-year 2023.

ABBOTT DECLARES 399TH CONSECUTIVE QUARTERLY DIVIDEND
On Sept. 21, 2023, the board of directors of Abbott declared the company's quarterly dividend of $0.51 per share. Abbott's cash dividend is payable Nov. 15, 2023, to shareholders of record at the close of business on Oct. 13, 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 third-quarter earnings conference call through its Investor Relations website at www.abbottinvestor.com at 8 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 December 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. For the full-year 2023, Abbott projects COVID-19 testing-related sales of approximately $1.5 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 3Q23



COVID Tests Sales 3Q23

($ in millions)

U.S.


Int'l


Total



U.S.


Int'l


Total

Total Diagnostics

1,013


1,436


2,449



207


98


305

Core Laboratory

317


997


1,314



2


3


5

Molecular

38


95


133



5


3


8

Rapid Diagnostics

561


301


862



200


92


292















Sales 3Q22



COVID Tests Sales 3Q22

($ in millions)

U.S.


Int'l


Total



U.S.


Int'l


Total

Total Diagnostics

1,711


1,930


3,641



1,002


669


1,671

Core Laboratory

281


938


1,219



4


7


11

Molecular

65


118


183



26


28


54

Rapid Diagnostics

1,273


839


2,112



972


634


1,606















Sales 9M23



COVID Tests Sales 9M23

($ in millions)

U.S.


Int'l


Total



U.S.


Int'l


Total

Total Diagnostics

3,309


4,145


7,454



1,031


267


1,298

Core Laboratory

917


2,872


3,789



6


10


16

Molecular

128


293


421



19


17


36

Rapid Diagnostics

1,975


853


2,828



1,006


240


1,246















Sales 9M22



COVID Tests Sales 9M22

($ in millions)

U.S.


Int'l


Total



U.S.


Int'l


Total

Total Diagnostics

6,864


6,328


13,192



4,722


2,577


7,299

Core Laboratory

836


2,788


3,624



12


39


51

Molecular

308


507


815



174


201


375

Rapid Diagnostics

5,436


2,923


8,359



4,536


2,337


6,873

 

Abbott Laboratories and Subsidiaries

Condensed Consolidated Statement of Earnings

Third Quarter Ended September 30, 2023 and 2022

(in millions, except per share data)

(unaudited)





3Q23


3Q22


% Change


Net Sales

$10,143


$10,410


(2.6)









Cost of products sold, excluding amortization expense

4,605


4,629


(0.5)


Amortization of intangible assets

496


498


(0.4)


Research and development

672


782


(14.0)


Selling, general, and administrative

2,723


2,731


(0.3)


Total Operating Cost and Expenses

8,496


8,640


(1.7)









Operating Earnings

1,647


1,770


(7.0)









Interest expense, net

69


86


(20.9)


Net foreign exchange (gain) loss

(10)


19


n/m


Other (income) expense, net

(83)


(93)


(10.8)


Earnings before taxes

1,671


1,758


(4.9)


Taxes on earnings

235


323


(27.4)









Net Earnings

$1,436


$1,435


0.1









Net Earnings excluding Specified Items, as described below

$2,000


$2,036


(1.8)

1)








Diluted Earnings per Common Share

$0.82


$0.81


1.2









Diluted Earnings per Common Share,

excluding Specified Items, as described below

$1.14


$1.15


(0.9)

1)








Average Number of Common Shares Outstanding

Plus Dilutive Common Stock Options

1,748


1,764





NOTES:

See table tilted "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 page.



1)

2023 Net Earnings and Diluted Earnings per Common Share, excluding Specified Items, excludes net after-tax charges of $564 million, or $0.32 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 $601 million, or $0.34 per share, for intangible amortization, charges related to the impairment of R&D intangible assets, expenses associated with acquisitions, restructuring and cost reduction initiatives and other net expenses.

 

Abbott Laboratories and Subsidiaries

Condensed Consolidated Statement of Earnings

Nine Months Ended September 30, 2023 and 2022

(in millions, except per share data)

(unaudited)





9M23


9M22


% Change


Net Sales

$29,868


$33,562


(11.0)









Cost of products sold, excluding amortization expense

13,419


14,549


(7.8)


Amortization of intangible assets

1,485


1,517


(2.1)


Research and development

2,041


2,163


(5.6)


Selling, general, and administrative

8,225


8,275


(0.6)


Total Operating Cost and Expenses

25,170


26,504


(5.0)









Operating Earnings

4,698


7,058


(33.4)









Interest expense, net

182


309


(41.3)


Net foreign exchange (gain) loss

17


16


5.0


Other (income) expense, net

(370)


(253)


46.2


Earnings before taxes

4,869


6,986


(30.3)


Taxes on earnings

740


1,086


(31.9)

1)








Net Earnings

$4,129


$5,900


(30.0)









Net Earnings excluding Specified Items, as described below

$5,708


$7,655


(25.4)

2)








Diluted Earnings per Common Share

$2.35


$3.32


(29.2)









Diluted Earnings per Common Share,

excluding Specified Items, as described below

$3.25


$4.31


(24.6)

2)








Average Number of Common Shares Outstanding

Plus Dilutive Common Stock Options

1,750


1,768





NOTES:

See table tilted "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 page.



1)

2023 Taxes on Earnings includes the recognition of approximately $59 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 $20 million of net tax expense as a result of the resolution of various tax positions related to prior years and approximately $36 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 $1.579 billion, or $0.90 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 $1.755 billion, or $0.99 per share, for intangible amortization, charges related to a voluntary recall and the impairment of R&D intangible assets, acquisition-related costs and other net expenses.

 

Abbott Laboratories and Subsidiaries

Non-GAAP Reconciliation of Financial Information

Third Quarter Ended September 30, 2023 and 2022

(in millions, except per share data)

(unaudited)



3Q23


As

Reported

(GAAP)


Specified

Items


As

Adjusted







Intangible Amortization

$            496


$          (496)


$              —

Gross Margin

5,042


542


5,584

R&D

672


(46)


626

SG&A

2,723


(43)


2,680

Other (income) expense, net

(83)


(23)


(106)

Earnings before taxes

1,671


654


2,325

Taxes on Earnings

235


90


325

Net Earnings

1,436


564


2,000

Diluted Earnings per Share

$           0.82


$           0.32


$           1.14

 

Specified items reflect intangible amortization expense of $496 million and other net expenses of $158 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.


3Q22


As

Reported

(GAAP)


Specified

Items


As

Adjusted







Intangible Amortization

$            498


$          (498)


$              —

Gross Margin

5,283


540


5,823

R&D

782


(146)


636

SG&A

2,731


(39)


2,692

Other (income) expense, net

(93)


(4)


(97)

Earnings before taxes

1,758


729


2,487

Taxes on Earnings

323


128


451

Net Earnings

1,435


601


2,036

Diluted Earnings per Share

$           0.81


$           0.34


$           1.15

 

Specified items reflect intangible amortization expense of $498 million and other net expenses of $231 million associated with the impairment of R&D intangible assets, costs associated with acquisitions and other expenses. See table titled "Details of Specified Items" for additional details regarding specified items.

Abbott Laboratories and Subsidiaries

Non-GAAP Reconciliation of Financial Information

Nine Months Ended September 30, 2023 and 2022

(in millions, except per share data)

(unaudited)



9M23


As

Reported

(GAAP)


Specified

Items


As

Adjusted







Intangible Amortization

$         1,485


$       (1,485)


$              —

Gross Margin

14,964


1,591


16,555

R&D

2,041


(144)


1,897

SG&A

8,225


(67)


8,158

Other (income) expense, net

(370)


34


(336)

Earnings before taxes

4,869


1,768


6,637

Taxes on Earnings

740


189


929

Net Earnings

4,129


1,579


5,708

Diluted Earnings per Share

$           2.35


$           0.90


$           3.25

 

Specified items reflect intangible amortization expense of $1.485 billion and other net expenses of $283 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.


9M22


As

Reported

(GAAP)


Specified

Items


As

Adjusted







Intangible Amortization

$         1,517


$       (1,517)


$              —

Gross Margin

17,496


1,739


19,235

R&D

2,163


(211)


1,952

SG&A

8,275


(92)


8,183

Other (income) expense, net

(253)


(31)


(284)

Earnings before taxes

6,986


2,073


9,059

Taxes on Earnings

1,086


318


1,404

Net Earnings

5,900


1,755


7,655

Diluted Earnings per Share

$           3.32


$           0.99


$           4.31

 

Specified items reflect intangible amortization expense of $1.517 billion and other net expenses of $556 million that includes charges for the impairment of R&D intangible assets, costs associated with a product recall, acquisition-related costs, and other net expenses. See table titled "Details of Specified Items" for additional details regarding specified items.

A reconciliation of the third-quarter tax rates for 2023 and 2022 is shown below:


3Q23


($ in millions)

Pre-Tax

Income


Taxes on

Earnings


Tax

Rate


As reported (GAAP)

$         1,671


$            235


14.0 %


Specified items

654


90




Excluding specified items

$         2,325


$            325


14.0 %










3Q22


($ in millions)

Pre-Tax

Income


Taxes on

Earnings


Tax

Rate


As reported (GAAP)

$         1,758


$            323


18.4 %


Specified items

729


128




Excluding specified items

$         2,487


$            451


18.1 %


 

A reconciliation of the year-to-date tax rates for 2023 and 2022 is shown below:


9M23


($ in millions)

Pre-Tax

Income


Taxes on

Earnings


Tax

Rate


As reported (GAAP)

$         4,869


$            740


15.2 %

1)

Specified items

1,768


189




Excluding specified items

$         6,637


$            929


14.0 %










9M22


($ in millions)

Pre-Tax

Income


Taxes on

Earnings


Tax

Rate


As reported (GAAP)

$         6,986


$         1,086


15.6 %

2)

Specified items

2,073


318




Excluding specified items

$         9,059


$         1,404


15.5 %


 

1)

2023 Taxes on Earnings includes the recognition of approximately $59 million of net tax expense as a result of the resolution of various tax positions related to prior years.



2)

2022 Taxes on Earnings includes the recognition of approximately $20 million of net tax expense as a result of the resolution of various tax positions related to prior years and approximately $36 million in excess tax benefits associated with share-based compensation.

 

Abbott Laboratories and Subsidiaries

Non-GAAP Revenue Reconciliation

Third Quarter and Nine Months Ended September 30, 2023 and 2022

($ in millions)

(unaudited)




3Q23


3Q22


% Change vs. 3Q22














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


10,143

(47)

(4)

10,092


10,410

(21)

10,389


(2.6)


(2.9)

(1.5)

U.S.


3,817

(46)

3,771


4,094

4,094


(6.8)


(7.9)

(7.9)

Intl


6,326

(1)

(4)

6,321


6,316

(21)

6,295


0.2


0.4

2.6
















Total Nutrition


2,073

(4)

2,069


1,795

(21)

1,774


15.5


16.7

18.1

U.S.


860

860


686

686


25.4


25.4

25.4

Intl


1,213

(4)

1,209


1,109

(21)

1,088


9.3


11.0

13.4
















Pediatric Nutrition


1,001

(4)

997


827

(21)

806


20.9


23.5

24.9

U.S.


506

506


357

357


41.8


41.8

41.8

Intl


495

(4)

491


470

(21)

449


5.1


9.1

11.5
















Total Medical Devices


4,249

(47)

4,202


3,645

3,645


16.6


15.3

14.7

U.S.


1,940

(46)

1,894


1,694

1,694


14.6


11.8

11.8

Intl


2,309

(1)

2,308


1,951

1,951


18.4


18.4

17.1
















Vascular


672

(47)

625


606

606


10.9


3.0

2.8

U.S.


251

(46)

205


213

213


17.5


(4.1)

(4.1)

Intl


421

(1)

420


393

393


7.3


6.9

6.5


















9M23


9M22


% Change vs. 9M22














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


29,868

(90)

(41)

29,737


33,562

(112)

33,450


(11.0)


(11.1)

(8.7)

U.S.


11,503

(85)

11,418


13,923

13,923


(17.4)


(18.0)

(18.0)

Intl


18,365

(5)

(41)

18,319


19,639

(112)

19,527


(6.5)


(6.2)

(2.0)
















Total Nutrition


6,116

(41)

6,075


5,642

(112)

5,530


8.4


9.9

12.7

U.S.


2,553

2,553


2,124

2,124


20.2


20.2

20.2

Intl


3,563

(41)

3,522


3,518

(112)

3,406


1.3


3.4

8.0
















Pediatric Nutrition


2,949

(41)

2,908


2,599

(112)

2,487


13.5


17.0

19.1

U.S.


1,472

1,472


1,108

1,108


32.8


32.8

32.8

Intl


1,477

(41)

1,436


1,491

(112)

1,379


(0.9)


4.2

8.1
















Total Medical Devices


12,444

(90)

12,354


11,024

11,024


12.9


12.1

13.8

U.S.


5,631

(85)

5,546


4,927

4,927


14.3


12.6

12.6

Intl


6,813

(5)

6,808


6,097

6,097


11.8


11.7

14.8
















Vascular


2,004

(90)

1,914


1,878

1,878


6.7


1.8

3.9

U.S.


733

(85)

648


650

650


12.7


(0.5)

(0.5)

Intl


1,271

(5)

1,266


1,228

1,228


3.5


3.1

6.2



(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

Third Quarter Ended September 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

$                    3


$                  19


$                496


$                  24


$                542

R&D

(1)


(13)



(32)


(46)

SG&A

(22)


(22)



1


(43)

Other (income) expense, net

5




(28)


(23)

Earnings before taxes

$                  21


$                  54


$                496


$                  83


654

Taxes on Earnings (d)









90

Net Earnings









$                564

Diluted Earnings per Share









$               0.32


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 acquired businesses, as well as legal and other costs 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.

 

Abbott Laboratories and Subsidiaries

Details of Specified Items

Third Quarter Ended September 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

$                  15


$                  11


$                498


$                  16


$                540

R&D

(3)


(3)



(140)


(146)

SG&A

(13)


(5)



(21)


(39)

Other (income) expense, net

(4)





(4)

Earnings before taxes

$                  35


$                  19


$                498


$                177


729

Taxes on Earnings (d)









128

Net Earnings









$                601

Diluted Earnings per Share









$               0.34




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.


c)

Other includes charges related to an impairment of R&D intangible assets acquired in a business combination, incremental costs to comply with the European Union's Medical Device (MDR) and In Vitro Diagnostics Medical Device (IVDR) Regulations for previously approved products and costs related to certain litigation.


d)

Reflects the net tax benefit associated with the specified items.

 

Abbott Laboratories and Subsidiaries

Details of Specified Items

Nine Months Ended September 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

$                  15


$                  51


$             1,485


$                  40


$             1,591

R&D

(13)


(5)



(126)


(144)

SG&A

(43)


(28)



4


(67)

Other (income) expense, net

46




(12)


34

Earnings before taxes

$                  25


$                  84


$             1,485


$                174


1,768

Taxes on Earnings (d)









189

Net Earnings









$             1,579

Diluted Earnings per Share









$               0.90


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.

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

Nine Months Ended September 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

$                  56


$                  (1)


$             1,517


$                167


$             1,739

R&D

(10)


(4)



(197)


(211)

SG&A

(31)


(5)



(56)


(92)

Other (income) expense, net

(15)




(16)


(31)

Earnings before taxes

$                112


$                    8


$             1,517


$                436


2,073

Taxes on Earnings (d)









318

Net Earnings









$             1,755

Diluted Earnings per Share









$               0.99


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 primarily relates to the net costs related to a voluntary recall within the Nutrition segment, charges associated with the impairment of R&D intangible assets acquired in a business combination, incremental costs to comply with the European Union's MDR and IVDR Regulations for previously approved products and costs related to certain litigation.

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.

 

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SOURCE Abbott

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