10-QPeriod: Q3 FY2021

ABBOTT LABORATORIES Quarterly Report for Q3 Ended Sep 30, 2021

Filed November 3, 2021For Securities:ABT

Summary

Abbott Laboratories reported strong financial performance for the nine months ended September 30, 2021, with total net sales reaching $31.6 billion, a significant increase of 32.2% year-over-year. This growth was substantially driven by robust demand for its COVID-19 testing products, which contributed $5.4 billion in sales. Excluding COVID-19 testing, overall net sales still demonstrated impressive growth of 17.3%, highlighting the underlying strength across Abbott's diverse product portfolio. The company's strategic segments also showed healthy expansion. Diagnostic Products saw a remarkable 73.0% increase in sales (excluding foreign exchange), largely due to its COVID-19 testing solutions and continued growth in core laboratory and molecular diagnostics. Medical Devices also posted strong growth of 24.5% (excluding foreign exchange), fueled by its innovative products, particularly in diabetes care (FreeStyle Libre), structural heart, and electrophysiology. The company's commitment to shareholder returns is evident through increased dividends and ongoing share repurchases.

Financial Highlights

51 data points
Beta

Revenue

$10.93B

59.5% Gross Margin

Net Income

$2.10B

19.2% Net Margin

EPS (Diluted)

$1.17

Total Assets

$73.80B

Cash & Equivalents

$9.30B

Free Cash Flow

$2.24B

Financial Statements
Beta
Revenue$10.93B
Cost of Revenue$4.42B
Gross Profit$6.50B
R&D Expenses$672.00M
SG&A Expenses$2.77B
Operating Expenses$8.38B
Operating Income$2.55B
Interest Expense$133.00M
Net Income$2.10B
EPS (Basic)$1.18
EPS (Diluted)$1.17
Shares Outstanding (Basic)1.77B
Shares Outstanding (Diluted)1.79B

Key Highlights

  • 1Total net sales for the nine months ended September 30, 2021, increased by 32.2% to $31.6 billion, driven significantly by COVID-19 testing sales ($5.4 billion).
  • 2Excluding COVID-19 testing sales, net sales grew by 17.3%, demonstrating broad-based growth across segments.
  • 3Diagnostic Products segment sales surged by 73.0% (excluding foreign exchange), propelled by COVID-19 tests and other diagnostic solutions.
  • 4Medical Devices segment revenue grew by 24.5% (excluding foreign exchange), with notable performance in Diabetes Care (FreeStyle Libre), Structural Heart, and Electrophysiology.
  • 5Diluted Earnings Per Share (EPS) for the nine months was $2.83, a substantial increase from $1.30 in the prior year.
  • 6The company declared a quarterly dividend of $0.45 per share, a 25% increase year-over-year.
  • 7Operating cash flow remained strong, generating $7.5 billion for the nine months ended September 30, 2021.

Frequently Asked Questions

Abbott's significant revenue growth was primarily driven by strong demand for its COVID-19 testing products, which generated $5.4 billion in sales for the first nine months of 2021. Beyond COVID-19 testing, the company experienced robust growth across its core segments, including Diagnostics, Medical Devices (especially Diabetes Care with the FreeStyle Libre system), Nutritional Products, and Established Pharmaceutical Products.

The Diagnostic Products segment saw exceptional growth, with sales increasing by 73.0% (excluding foreign exchange) for the nine months ended September 30, 2021. This surge was largely attributable to the widespread demand for Abbott's rapid antigen tests (BinaxNOW, Panbio, ID NOW) and molecular tests for COVID-19. The segment's performance highlights the critical role Abbott played in global COVID-19 response efforts.

While COVID-19 testing sales significantly boosted revenue in the current period, Abbott acknowledges the unpredictability of the pandemic's duration and impact. Management noted that demand for COVID-19 tests in the third quarter of 2021 was driven by the Delta variant. However, the company is also focusing on growth in its non-COVID-19 businesses, which showed substantial growth even when excluding COVID-19 testing revenue, indicating a diversified and resilient product pipeline.

Abbott is actively returning value to shareholders through a combination of increased dividends and share repurchases. The company declared a quarterly dividend of $0.45 per share, representing a 25% increase over the prior year. Additionally, Abbott continued its share repurchase program, utilizing $1.187 billion for repurchases in the first nine months of 2021, demonstrating its commitment to enhancing shareholder returns.