Summary
Abbott Laboratories (ABT) filed an 8-K on February 18, 2022, disclosing a proactive, voluntary recall of Similac-brand powder infant formulas manufactured at its Sturgis, Michigan facility. This recall primarily affects products distributed in the U.S. and Canada. While the company is confirming its previously issued full-year 2022 guidance for adjusted diluted earnings per share from continuing operations at $4.70 or more, it anticipates a one-time expense in the first quarter of 2022 related to recall expenses, including inventory destruction. Despite these recall-related costs, Abbott does not expect the expenses to have a material impact on its consolidated financial statements. The company has issued a press release to inform consumers about the recall. Investors should note that while the company is reiterating its full-year earnings guidance, the undisclosed but expected expenses in Q1 2022 related to this recall warrant attention for short-term financial impacts.
Key Highlights
- 1Voluntary recall of Similac-brand powder infant formulas manufactured in Sturgis, Michigan, impacting U.S. and Canada.
- 2Full-year 2022 adjusted diluted EPS guidance reaffirmed at a minimum of $4.70.
- 3One-time specified item expected in Q1 2022 for recall-related expenses.
- 4Recall expenses include inventory destruction and other associated costs.
- 5Abbott does not anticipate a material impact on consolidated financial statements from these recall expenses.
- 6Company has issued a press release to notify consumers.
- 7Robert E. Funck, Jr., Executive Vice President, Finance and Chief Financial Officer, signed the report.