01—Abstract
Summary
Summary of the 8-K filed January 24, 2024. Cited figures are marked; the original filing is the authoritative source.
Abbott reported fourth-quarter 2023 reported sales of $10.241 billiona, up 1.5% year over year.
Organic growth was 2.1%, and 11.0% excluding COVID-19 testing sales, which fell from $1.069 billion to $288 millionb. Fourth-quarter GAAP diluted EPS was $0.91 (up 54.2%), and adjusted diluted EPS was $1.19 (up 15.5%). Growth was led by Medical Devices (reported +17.5%, with Diabetes Care and Electrophysiology strong), Nutrition (+12.2%, with U.S. infant formula share recovery), and Established Pharmaceuticals (+0.5% reported, +8.8% organic).
For full-year 2023, reported sales fell 8.1% to $40.109 billionc, driven by the expected decline in COVID-19 testing. Excluding COVID-19 tests, organic sales grew 11.6%. Full-year GAAP diluted EPS was $3.26 (down 16.6%), and adjusted diluted EPS was $4.44 (down 16.9%).
Diagnostics fell 39.4% on reported sales, while Medical Devices rose 14.1% and Nutrition rose 9.3%. For 2024, Abbott guided to GAAP diluted EPS of $3.20 to $3.40d and adjusted diluted EPS of $4.50 to $4.70, implying roughly 1% to 6% adjusted EPS growth. Specified items are projected at about $1.30 per share, mainly intangible amortization.
Organic sales growth excluding COVID-19 testing is projected at 8% to 10%. The company also declared its 400th consecutive quarterly dividend of $0.55 per share and noted 52 consecutive years of dividend increases.
02—Key points
Key Highlights
- Q4 2023 reported sales rose 1.5% to $10.241B; organic growth excluding COVID-19 tests was 11.0%, while COVID-19 testing sales fell to $288M from $1.069B.
- FY 2023 reported sales declined 8.1% to $40.109B, but organic sales excluding COVID-19 tests grew 11.6%, showing strong underlying base-business performance.
- Q4 GAAP diluted EPS was $0.91 (up 54.2%) and adjusted diluted EPS was $1.19 (up 15.5%); FY GAAP EPS was $3.26 and adjusted EPS was $4.44 (both down about 17%).
- Medical Devices was the standout segment, with FY reported sales up 14.1% and Q4 up 17.5%; FreeStyle Libre Q4 sales reached $1.4B (+25.5%).
- 2024 guidance calls for GAAP EPS of $3.20 to $3.40, adjusted EPS of $4.50 to $4.70, and organic growth excluding COVID-19 testing of 8% to 10%.
- Nutrition regained momentum, with Q4 reported sales up 12.2% and Abbott reclaiming the leading U.S. infant formula position by volume.
- Abbott declared its 400th consecutive quarterly dividend of $0.55 per share, payable Feb. 15, 2024, and has increased its dividend for 52 consecutive years.
03—Questions
Frequently Asked Questions
Why did Abbott's reported sales decline in 2023 even though the underlying business grew?
Full-year reported sales fell 8.1% to $40.1 billion, mainly because COVID-19 testing sales dropped sharply (about 17.8 percentage points of the decline). Excluding COVID-19 tests, organic sales grew 11.6%, and Nutrition, Medical Devices, and Established Pharmaceuticals all grew organically.
What do the GAAP and adjusted EPS figures mean, and why do they differ?
GAAP diluted EPS for 2023 was $3.26, while adjusted EPS was $4.44. The $1.18 difference reflects specified items, mostly intangible amortization ($1.966 billion pre-tax) plus restructuring, acquisition-related costs, and other net expenses. Management uses adjusted EPS to assess ongoing performance, but the filing cautions that non-GAAP measures should not replace GAAP results.
What is the outlook for 2024, and what is the key risk to the forecast?
Abbott expects GAAP EPS of $3.20 to $3.40 and adjusted EPS of $4.50 to $4.70, with organic sales growth excluding COVID-19 tests of 8% to 10%. The company says it cannot reliably forecast COVID-19 test demand or foreign exchange impacts, so reported growth could differ materially from organic growth.
How is Abbott's Diagnostics business changing after the COVID-19 testing decline?
Diagnostics reported sales fell 39.4% for 2023 to $9.99 billion, and Q4 fell 22.7%. Excluding COVID-19 tests, Diagnostics grew 5.8% organically for the full year, with Core Laboratory up 9.4% and Rapid Diagnostics up 1.3%. Diagnostics is now more dependent on the base business and the core laboratory franchise.
Is the dividend still secure?
Abbott declared a $0.55 quarterly dividend, its 400th consecutive quarterly payment, payable Feb. 15, 2024, to holders of record on Jan. 12, 2024. The company has increased its dividend for 52 consecutive years and is a member of the S&P 500 Dividend Aristocrats Index.
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