How did Abbott perform in Q3 2024 relative to the prior year?

Net sales rose 4.9% to $10.635 billion, and GAAP operating earnings increased 12.8% to $1.859 billion. GAAP net earnings grew 14.6% to $1.646 billion, while adjusted net earnings rose 5.9% to $2.119 billion. Organic growth excluding COVID-19 testing was 8.2%, with foreign exchange a headwind of 2.5 points.

Why is there a difference between GAAP and adjusted EPS?

Adjusted EPS excludes specified items, which in Q3 2024 totaled $0.27 per share (about $473 million after tax). The largest component is intangible amortization of $470 million, followed by about $82 million of other net expenses, including acquisition and divestiture costs, impairment charges and EU Medical Device Regulation compliance costs. Investors should weigh GAAP results alongside the non-GAAP figures, as Abbott itself advises.

What changed in Abbott's full-year 2024 guidance?

Abbott raised the midpoint of its full-year adjusted diluted EPS range, which is now $4.64-$4.70, and projects GAAP diluted EPS of $3.34-$3.40. Organic sales growth guidance of 9.5%-10.0% excluding COVID-19 testing is unchanged. Management said it expects results at the upper end of its initial guidance ranges. The company does not provide a GAAP reconciliation for its organic sales growth guidance because foreign exchange and COVID-19 test demand are hard to forecast.

Which business segments drove growth, and which lagged?

Medical Devices was the clear leader, with reported sales up 11.7% and organic growth of 13.3%, including double-digit growth in both the U.S. and international markets. Diabetes Care, driven by FreeStyle Libre, was the largest contributor. Diagnostics was the laggard on a reported basis, down 1.5%, mainly due to lower COVID-19 testing sales, though its core business grew. Nutrition was roughly flat reported but grew 3.4% organically, with Adult Nutrition strong and Pediatric Nutrition weaker, particularly internationally.

What do the capital return announcements mean for shareholders?

Abbott's board authorized a new share repurchase program of up to $7 billion of common shares. The company also declared a quarterly dividend of $0.55 per share, payable November 15, 2024, to holders of record on October 15, 2024. This marks the 403rd consecutive quarterly dividend, and Abbott has increased its dividend for 52 consecutive years, making it a member of the S&P 500 Dividend Aristocrats Index.

ABT 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed October 16, 2024. Cited figures are marked; the original filing is the authoritative source.

Abbott Laboratories reported third-quarter 2024 results on October 16, 2024, with net sales of $10.6 billion^a, up 4.9% on a reported basis and 8.2% organically excluding COVID-19 testing sales.

Growth was led by Medical Devices, where sales rose 11.7% reported and 13.3% organically, with Diabetes Care (including FreeStyle Libre continuous glucose monitors, which exceeded $1.6 billion^b in quarterly sales) and Structural Heart, Heart Failure, and Electrophysiology posting double-digit gains. Nutrition was roughly flat on a reported basis (down 0.3%) but grew 3.4% organically, with Adult Nutrition (Ensure) up 9.1% organically. Diagnostics declined 1.5% reported as COVID-19 testing sales fell to $265 million from $305 million, though excluding COVID tests, organic growth was 3.3%.

Profitability was mixed. GAAP diluted EPS rose 14.6% to $0.94^c and adjusted diluted EPS rose 6.1% to $1.21, with the gap driven by $470 million of intangible amortization and about $82 million of other specified items. Operating earnings grew 12.8% to $1.86 billion.

For full-year 2024, Abbott raised the midpoint of its adjusted EPS guidance to $4.64^d-$4.70 and set GAAP EPS guidance at $3.34-$3.40, while maintaining its 9.5%-10.0% organic sales growth guidance excluding COVID-19 testing. Management indicated it expects to reach the upper end of initial guidance ranges.

Abbott also authorized a new share repurchase program of up to $7 billion and declared a quarterly dividend of $0.55 per share, its 403rd consecutive quarterly dividend and the 52nd consecutive year of dividend increases. Key watch items include the sustainability of Medical Devices momentum, the continued decline in COVID-19 testing revenue, and the implied Q4 2024 adjusted EPS of $1.31-$1.37, which will test whether earnings growth can keep pace with the full-year guidance raise.

02—Key points

Key Highlights

Net sales of $10.635 billion, up 4.9% reported and 7.6% organic (8.2% excluding COVID-19 testing sales).
Medical Devices sales rose 11.7% reported and 13.3% organic, led by Diabetes Care (CGM sales above $1.6 billion, up 19.1% reported), Structural Heart, Heart Failure and Electrophysiology.
GAAP diluted EPS of $0.94 (up 14.6%) and adjusted diluted EPS of $1.21 (up 6.1%); specified items totaled $0.27 per share, mainly intangible amortization.
Full-year 2024 adjusted diluted EPS guidance raised at the midpoint to $4.64-$4.70; GAAP EPS guidance of $3.34-$3.40; organic sales growth guidance of 9.5%-10.0% excluding COVID-19 testing maintained.
Q4 2024 adjusted EPS guidance of $1.31-$1.37 (GAAP $0.96-$1.02).
New share repurchase authorization of up to $7 billion; quarterly dividend of $0.55 per share (payable Nov. 15, 2024) and 52 consecutive years of dividend increases.
COVID-19 testing sales fell to $265 million from $305 million, weighing on Diagnostics (reported sales down 1.5%); Adult Nutrition grew 9.1% organically while Pediatric Nutrition declined 2.7% organically.

03—Questions

Frequently Asked Questions

How did Abbott perform in Q3 2024 relative to the prior year?
Net sales rose 4.9% to $10.635 billion, and GAAP operating earnings increased 12.8% to $1.859 billion. GAAP net earnings grew 14.6% to $1.646 billion, while adjusted net earnings rose 5.9% to $2.119 billion. Organic growth excluding COVID-19 testing was 8.2%, with foreign exchange a headwind of 2.5 points.
Why is there a difference between GAAP and adjusted EPS?
Adjusted EPS excludes specified items, which in Q3 2024 totaled $0.27 per share (about $473 million after tax). The largest component is intangible amortization of $470 million, followed by about $82 million of other net expenses, including acquisition and divestiture costs, impairment charges and EU Medical Device Regulation compliance costs. Investors should weigh GAAP results alongside the non-GAAP figures, as Abbott itself advises.
What changed in Abbott's full-year 2024 guidance?
Abbott raised the midpoint of its full-year adjusted diluted EPS range, which is now $4.64-$4.70, and projects GAAP diluted EPS of $3.34-$3.40. Organic sales growth guidance of 9.5%-10.0% excluding COVID-19 testing is unchanged. Management said it expects results at the upper end of its initial guidance ranges. The company does not provide a GAAP reconciliation for its organic sales growth guidance because foreign exchange and COVID-19 test demand are hard to forecast.
Which business segments drove growth, and which lagged?
Medical Devices was the clear leader, with reported sales up 11.7% and organic growth of 13.3%, including double-digit growth in both the U.S. and international markets. Diabetes Care, driven by FreeStyle Libre, was the largest contributor. Diagnostics was the laggard on a reported basis, down 1.5%, mainly due to lower COVID-19 testing sales, though its core business grew. Nutrition was roughly flat reported but grew 3.4% organically, with Adult Nutrition strong and Pediatric Nutrition weaker, particularly internationally.
What do the capital return announcements mean for shareholders?
Abbott's board authorized a new share repurchase program of up to $7 billion of common shares. The company also declared a quarterly dividend of $0.55 per share, payable November 15, 2024, to holders of record on October 15, 2024. This marks the 403rd consecutive quarterly dividend, and Abbott has increased its dividend for 52 consecutive years, making it a member of the S&P 500 Dividend Aristocrats Index.

04—Continue

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