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Abbott Laboratories
CEO : Mr. Robert B. Ford

Quarterly earnings growth(YoY,%)

Period	Revenue	Operating Income	EPS	Release Date
2022 Q4	-12.0% YoY	-45.2%	-47.5%	2023-01-25

Robert Ford says,

2022 Results and Outlook

• Abbott achieved ongoing EPS of $5.34, exceeding original EPS guidance.
• COVID-19 pandemic and other macro business conditions remained challenging.
• Cautiously optimistic that these factors are starting to peak and ease in some cases.
• COVID testing sales are expected to decline significantly as COVID-19 transitions to endemic seasonal respiratory virus.
• Forecasted ongoing EPS of $4.30 to $4.50 and organic sales growth, excluding COVID testing sales, in high single digits for 2023.
• Forecasted around $2 billion of COVID testing sales for the full year 2023.

Nutrition

• Sales declined around 6% in both Q4 and full year due to manufacturing disruptions at one U.S. infant formula facility.
• Production at the facility is up and running and expanding for non-WIC brands.

Diagnostics

• Sales growth in Q4 was negatively impacted by a year-over-year decline in COVID-19 test sales.
• Rapid testing platforms, including BinaxNOW, Panbio, and ID NOW, compromised approximately 95% of COVID testing sales.
• Excluding COVID testing sales, worldwide diagnostics grew over 11% in Q4.
• Growth in rapid diagnostics was driven by strong demand for ID NOW and new testing channels.
• Continued rollout of Alinity and expanded test menus across platforms for immunoassay, clinical chemistry, and molecular testing.

Established Pharmaceuticals (EPD)

• Sales increased 8% in Q4 and over 10% for the full year.
• EPD continues to perform well with a broad portfolio targeting attractive therapeutic areas in fast-growing emerging markets.
• Strong performance in Q4 led by double-digit growth across several geographies.

Medical Devices

• Sales grew 7.5% in Q4 and 8% for the full year.
• Growth led by double-digit growth in electrophysiology, structural heart, and diabetes care in the U.S.
• Growth internationally was negatively impacted by COVID surges in China and lingering supply challenges in a couple of areas.
• Recent pipeline advancements and launches, including Aveir, Eterna, FreeStyle Libre 3, and Navitor.
• FreeStyle Libre named the best medical technology of the last 50 years by Galen Foundation.

Bob Funck says,

Organic Sales Growth

• Sales decreased by 6.1% on an organic basis in Q4.
• Excluding COVID testing-related sales and U.S. infant formula sales, total Abbott sales increased by 7.1% on an organic basis in Q4 and 7.4% for the full year 2022.
• For the full year 2023, Abbott forecasts organic sales growth, excluding the impact of COVID testing-related sales, to be in the high single-digits.

COVID-19 Testing Sales

• COVID testing-related sales were $1.1 billion in Q4, reflecting a YoY decline versus sales in the fourth quarter of the previous year.
• Abbott forecasts COVID testing-related sales of around $2 billion for the full year, with around $750 million forecasted in the first quarter.

Guidance

• Abbott issued guidance for full year ongoing earnings per share of $4.30 to $4.50.
• Abbott forecasts an adjusted gross margin ratio for the full year of approximately 56% of sales.
• Abbott forecasts R&D investment of around $2.5 billion and SG&A investment of around $11 billion.
• Abbott forecasts net interest expense of around $300 million, non-operating income of around $450 million, and a full year adjusted tax rate of approximately 14% for the year.

Foreign Exchange Impact

• Foreign exchange had an unfavorable YoY impact of 5.9% on Q4 sales.
• Based on current rates, Abbott expects exchange to have an unfavorable impact of approximately 1% on its reported full year sales.

Adjusted Gross Margin Ratio

• The adjusted gross margin ratio was 55.6% of sales in Q4, reflecting the impact of inflation and manufacturing disruptions on certain costs across Abbott’s businesses.

Q & A sessions,

Top Line Growth and Business Segments

• Excluding COVID and recall products, Abbott expects to grow high single-digits, probably at a higher end of the pre-pandemic range, probably 8% plus.
• The device portfolio is well set up to drive those high single-digit, low double-digit growth rates, with a combination of both recovery and steady recovery procedures.
• The emerging markets continue to be a great opportunity for Abbott, with strengthened positions in diagnostics throughout these years and continued successful rollout of Alinity in their core molecular diagnostics and recovery in infant formula.

Libre Glucose Monitoring and Potential Growth

• Abbott expects continued growth in the U.S. in terms of market expansion, with a significant opportunity with the Basel expansion, which is a great growth opportunity. 2023 milestone for sales is not expected, but significant development is underway for compline glucose ketone sensor with the FDA to support a dual sensor.
• The Lingo platform is another key growth driver for Abbott, with two Lingo products expected to launch in Europe this year. Abbott is executing very strongly on all these areas and expects to achieve the $10 billion revenue goal for this product.

Tricuspid Repair Market

• Abbott expects the uptake of the tricuspid repair market to be faster than the uptake for mitral, with three million people today suffering from tricuspid regurgitation and not a lot of really good options available for treatment.
• The product has already shown nice traction in Europe, and Abbott is now focusing on the U.S. market. The team will be presenting the trial in a couple of months, and Abbott believes it is a great opportunity.