Full Press Release Details
Abbott Reports Second-Quarter 2018 Results
Second-quarter reported sales growth of 17.0 percent; GAAP EPS from continuing operations of $0.40
Second-quarter organic sales growth of 8.0 percent
Second-quarter adjusted EPS from continuing operations of $0.73, above previous guidance range
Raises full-year 2018 outlook
ABBOTT PARK, Ill., July 18, 2018 Abbott today announced financial results for the second quarter ended June 30, 2018.
Second-quarter worldwide sales of $7.8 billion increased 17.0 percent on a reported basis and 8.0 percent on an organic* basis.
Reported diluted EPS from continuing operations under GAAP was $0.40 in the second quarter.
Adjusted diluted EPS from continuing operations, which excludes specified items, was $0.73, above Abbott s previous guidance range.
Abbott is raising its full-year 2018 EPS guidance range, which continues to reflect strong double-digit growth. Abbott projects full-year diluted EPS from continuing operations on a GAAP basis of $1.34 to $1.40. Projected full-year adjusted diluted EPS from continuing operations is now $2.85 to $2.91.
In May, Abbott received approval from the U.S. FDA for XIENCE Sierra TM , the newest generation of its gold-standard coronary stent system, which offers design and technology advances to provide an easier implant and greater ability to treat complex blockages. During the second quarter, XIENCE Sierra also received national reimbursement in Japan to treat people with coronary artery disease.
In May, Abbott announced U.S. FDA clearance of Advisor TM HD Grid Mapping Catheter, Sensor Enabled TM , which creates highly detailed maps of the heart and expands Abbott s leading electrophysiology product portfolio.
In July, Abbott received U.S. FDA approval for a next-generation version of its leading MitraClip heart valve repair device. This new version includes design advancements that simplify the minimally invasive procedure and enable more patients to be treated with MitraClip.
All four of our businesses exceeded expectations and contributed to strong growth overall, said Miles D. White, chairman and chief executive officer, Abbott. We forecast continued strong performance and are raising our full-year outlook despite recent currency shifts.
* See note on organic growth on the next page.
SECOND-QUARTER BUSINESS OVERVIEW
Note: Management believes that measuring sales growth rates on an organic basis is an appropriate way for investors to best understand the underlying performance of the business.
Organic sales growth:
Excludes prior year results for the Abbott Medical Optics (AMO) and St. Jude Medical vascular closure businesses, which were divested during the first quarter 2017;
Excludes the current and prior year results for Rapid Diagnostics, which reflect results for Alere Inc., which was acquired on Oct. 3, 2017; and
Excludes the impact of foreign exchange.
Following are sales by business segment and commentary for the second quarter and first half 2018:
($ in millions)
| % Change vs. 2Q17 | |||||||||||||||||||
| Sales 2Q18 | Reported | Organic | |||||||||||||||||
| U.S. | Int l | Total | U.S. | Int l | Total | U.S. | Int l | Total | |||||||||||
| Total * | 2,702 | 5,065 | 7,767 | 14.5 | 18.4 | 17.0 | 3.5 | 10.5 | 8.0 | ||||||||||
| Nutrition | 781 | 1,077 | 1,858 | 1.0 | 12.5 | 7.3 | 1.0 | 10.7 | 6.4 | ||||||||||
| Diagnostics | 652 | 1,221 | 1,873 | 69.1 | 37.6 | 47.2 | 2.2 | 8.5 | 6.6 | ||||||||||
| Established Pharmaceuticals | 1,129 | 1,129 | n/a | 10.5 | 10.5 | n/a | 12.3 | 12.3 | |||||||||||
| Medical Devices | 1,259 | 1,632 | 2,891 | 5.7 | 16.1 | 11.3 | 5.7 | 10.3 | 8.2 |
* Total 2018 Abbott sales from continuing operations include Other Sales of $16 million.
| % Change vs. 1H17 | |||||||||||||||||||
| Sales 1H18 | Reported | Organic | |||||||||||||||||
| U.S. | Int l | Total | U.S. | Int l | Total | U.S. | Int l | Total | |||||||||||
| Total * | 5,377 | 9,780 | 15,157 | 14.8 | 18.0 | 16.8 | 4.2 | 9.3 | 7.5 | ||||||||||
| Nutrition | 1,539 | 2,075 | 3,614 | 2.4 | 11.0 | 7.2 | 2.4 | 8.1 | 5.6 | ||||||||||
| Diagnostics | 1,352 | 2,358 | 3,710 | 78.9 | 40.8 | 52.6 | 2.0 | 7.9 | 6.1 | ||||||||||
| Established Pharmaceuticals | 2,173 | 2,173 | n/a | 10.2 | 10.2 | n/a | 9.7 | 9.7 | |||||||||||
| Medical Devices | 2,468 | 3,167 | 5,635 | 6.0 | 18.9 | 12.9 | 6.3 | 11.0 | 8.8 |
* Total 2018 Abbott sales from continuing operations include Other Sales of $25 million.
n/a = Not Applicable.
Note: In order to compute results excluding the impact of exchange rates, current year U.S. dollar sales are multiplied or divided, as appropriate, by the current year average foreign exchange rates and then those amounts are multiplied or divided, as appropriate, by the prior year average foreign exchange rates.
Second-quarter 2018 worldwide sales of $7.8 billion increased 17.0 percent on a reported basis. On an organic basis, worldwide sales increased 8.0 percent. Refer to pages 17 and 18 for a reconciliation of adjusted historical revenue.
($ in millions)
| % Change vs. 2Q17 | |||||||||||||||||||
| Sales 2Q18 | Reported | Organic | |||||||||||||||||
| U.S. | Int l | Total | U.S. | Int l | Total | U.S. | Int l | Total | |||||||||||
| Total | 781 | 1,077 | 1,858 | 1.0 | 12.5 | 7.3 | 1.0 | 10.7 | 6.4 | ||||||||||
| Pediatric | 469 | 582 | 1,051 | 2.1 | 10.2 | 6.4 | 2.1 | 8.1 | 5.3 | ||||||||||
| Adult | 312 | 495 | 807 | (0.7 | ) | 15.2 | 8.5 | (0.7 | ) | 13.9 | 7.8 |
| % Change vs. 1H17 | |||||||||||||||||||
| Sales 1H18 | Reported | Organic | |||||||||||||||||
| U.S. | Int l | Total | U.S. | Int l | Total | U.S. | Int l | Total | |||||||||||
| Total | 1,539 | 2,075 | 3,614 | 2.4 | 11.0 | 7.2 | 2.4 | 8.1 | 5.6 | ||||||||||
| Pediatric | 917 | 1,128 | 2,045 | 2.9 | 10.3 | 6.8 | 2.9 | 7.2 | 5.2 | ||||||||||
| Adult | 622 | 947 | 1,569 | 1.6 | 11.9 | 7.6 | 1.6 | 9.3 | 6.1 |
Worldwide Nutrition sales increased 7.3 percent on a reported basis in the second quarter, including a favorable 0.9 percent effect of foreign exchange, and increased 6.4 percent on an organic basis.
Worldwide Pediatric Nutrition sales increased 6.4 percent on a reported basis in the second quarter, including a favorable 1.1 percent effect of foreign exchange, and increased 5.3 percent on an organic basis. International sales increased 10.2 percent on a reported basis, including a favorable 2.1 percent effect of foreign exchange, and increased 8.1 percent on an organic basis. Strong performance in the quarter was led by growth in several countries across Asia, including Greater China, and Latin America.
Worldwide Adult Nutrition sales increased 8.5 percent on a reported basis in the second quarter, including a favorable 0.7 percent effect of foreign exchange, and increased 7.8 percent on an organic basis. International sales increased 15.2 percent on a reported basis, including a favorable 1.3 percent effect of foreign exchange, and increased 13.9 percent on an organic basis. Sales performance was led by strong growth of Ensure , Abbott s market-leading complete and balanced nutrition brand, and Glucerna , Abbott s market-leading diabetes-specific nutrition brand.
($ in millions)
| % Change vs. 2Q17 | |||||||||||||||||||
| Sales 2Q18 | Reported | Organic | |||||||||||||||||
| U.S. | Int l | Total | U.S. | Int l | Total | U.S. | Int l | Total | |||||||||||
| Total * | 652 | 1,221 | 1,873 | 69.1 | 37.6 | 47.2 | 2.2 | 8.5 | 6.6 | ||||||||||
| Core Laboratory | 248 | 880 | 1,128 | 6.8 | 11.7 | 10.6 | 6.8 | 7.9 | 7.7 | ||||||||||
| Molecular | 38 | 84 | 122 | (7.3 | ) | 16.6 | 7.9 | (7.3 | ) | 13.6 | 6.0 | ||||||||
| Point of Care | 108 | 31 | 139 | (3.9 | ) | 12.0 | (0.8 | ) | (3.9 | ) | 9.7 | (1.3 | ) | ||||||
| Rapid Diagnostics * | 258 | 226 | 484 | n/m | n/m | n/m | n/m | n/m | n/m |
* Rapid Diagnostics reflects sales from Alere Inc., which was acquired on Oct. 3, 2017. Organic growth rates above exclude results from the Rapid Diagnostics business.
| % Change vs. 1H17 | |||||||||||||||||||
| Sales 1H18 | Reported | Organic | |||||||||||||||||
| U.S. | Int l | Total | U.S. | Int l | Total | U.S. | Int l | Total | |||||||||||
| Total * | 1,352 | 2,358 | 3,710 | 78.9 | 40.8 | 52.6 | 2.0 | 7.9 | 6.1 | ||||||||||
| Core Laboratory | 476 | 1,671 | 2,147 | 6.2 | 12.7 | 11.2 | 6.2 | 7.3 | 7.0 | ||||||||||
| Molecular | 77 | 163 | 240 | (10.7 | ) | 17.0 | 6.4 | (10.7 | ) | 12.6 | 3.7 | ||||||||
| Point of Care | 218 | 62 | 280 | (1.7 | ) | 17.3 | 1.9 | (1.7 | ) | 14.0 | 1.3 | ||||||||
| Rapid Diagnostics * | 581 | 462 | 1,043 | n/m | n/m | n/m | n/m | n/m | n/m |
* Rapid Diagnostics reflects sales from Alere Inc., which was acquired on Oct. 3, 2017. Organic growth rates above exclude results from the Rapid Diagnostics business.
n/m = Percent change is not meaningful.
Worldwide Diagnostics sales increased 47.2 percent on a reported basis in the second quarter. On an organic basis, sales increased 6.6 percent. Refer to pages 17 and 18 for a reconciliation of adjusted historical revenue.
Core Laboratory Diagnostics sales increased 10.6 percent on a reported basis in the second quarter, including a favorable 2.9 percent effect of foreign exchange, and increased 7.7 percent on an organic basis. Growth in the quarter was driven by continued share gains globally.
Molecular Diagnostics sales increased 7.9 percent on a reported basis in the second quarter, including a favorable 1.9 percent effect of foreign exchange, and increased 6.0 percent on an organic basis. Worldwide sales were led by strong growth in infectious disease testing, Abbott s core area of focus in the molecular diagnostics market, which was partially offset by a planned scale down in other testing areas, primarily in the U.S.
Point of Care Diagnostics sales decreased 0.8 percent on a reported basis in the second quarter, including a favorable 0.5 percent effect of foreign exchange, and decreased 1.3 percent on an organic basis.
Rapid Diagnostics worldwide sales of $484 million were led by infectious disease and cardiometabolic testing.
Established Pharmaceuticals
($ in millions)
| % Change vs. 2Q17 | |||||||||||||||||||
| Sales 2Q18 | Reported | Organic | |||||||||||||||||
| U.S. | Int l | Total | U.S. | Int l | Total | U.S. | Int l | Total | |||||||||||
| Total | 1,129 | 1,129 | n/a | 10.5 | 10.5 | n/a | 12.3 | 12.3 | |||||||||||
| Key Emerging Markets | 866 | 866 | n/a | 8.4 | 8.4 | n/a | 12.0 | 12.0 | |||||||||||
| Other | 263 | 263 | n/a | 17.9 | 17.9 | n/a | 13.6 | 13.6 |
| % Change vs. 1H17 | |||||||||||||||||||
| Sales 1H18 | Reported | Organic | |||||||||||||||||
| U.S. | Int l | Total | U.S. | Int l | Total | U.S. | Int l | Total | |||||||||||
| Total | 2,173 | 2,173 | n/a | 10.2 | 10.2 | n/a | 9.7 | 9.7 | |||||||||||
| Key Emerging Markets | 1,659 | 1,659 | n/a | 8.6 | 8.6 | n/a | 9.5 | 9.5 | |||||||||||
| Other | 514 | 514 | n/a | 15.9 | 15.9 | n/a | 10.1 | 10.1 |
Established Pharmaceuticals sales increased 10.5 percent on a reported basis in the second quarter, including an unfavorable 1.8 percent effect of foreign exchange, and increased 12.3 percent on an organic basis.
Key Emerging Markets comprise several countries that represent the most attractive long-term growth opportunities for Abbott s branded generics product portfolio. Sales in these geographies increased 8.4 percent on a reported basis in the second quarter, including an unfavorable 3.6 percent effect of foreign exchange, and increased 12.0 percent on an organic basis. Sales growth was led by double-digit growth across several geographies, including India and China.
Medical Devices
($ in millions)
| % Change vs. 2Q17 | |||||||||||||||||||
| Sales 2Q18 | Reported | Organic | |||||||||||||||||
| U.S. | Int l | Total | U.S. | Int l | Total | U.S. | Int l | Total | |||||||||||
| Total | 1,259 | 1,632 | 2,891 | 5.7 | 16.1 | 11.3 | 5.7 | 10.3 | 8.2 | ||||||||||
| Cardiovascular and Neuromodulation | 1,147 | 1,274 | 2,421 | 3.4 | 10.7 | 7.1 | 3.4 | 5.4 | 4.4 | ||||||||||
| Rhythm Management | 262 | 281 | 543 | (3.6 | ) | 0.5 | (1.5 | ) | (3.6 | ) | (4.4 | ) | (4.0 | ) | |||||
| Electrophysiology | 193 | 235 | 428 | 25.0 | 24.6 | 24.8 | 25.0 | 18.7 | 21.6 | ||||||||||
| Heart Failure | 117 | 46 | 163 | (5.0 | ) | 27.6 | 2.4 | (5.0 | ) | 21.4 | 1.0 | ||||||||
| Vascular | 284 | 466 | 750 | (3.8 | ) | 7.0 | 2.6 | (3.8 | ) | 2.0 | (0.3 | ) | |||||||
| Structural Heart | 118 | 197 | 315 | 13.9 | 19.7 | 17.5 | 13.9 | 13.3 | 13.5 | ||||||||||
| Neuromodulation | 173 | 49 | 222 | 7.4 | 5.2 | 6.9 | 7.4 | 0.3 | 5.8 | ||||||||||
| Diabetes Care | 112 | 358 | 470 | 37.6 | 40.5 | 39.8 | 37.6 | 32.4 | 33.6 |
| % Change vs. 1H17 | |||||||||||||||||||
| Sales 1H18 | Reported | Organic | |||||||||||||||||
| U.S. | Int l | Total | U.S. | Int l | Total | U.S. | Int l | Total | |||||||||||
| Total | 2,468 | 3,167 | 5,635 | 6.0 | 18.9 | 12.9 | 6.3 | 11.0 | 8.8 | ||||||||||
| Cardiovascular and Neuromodulation | 2,270 | 2,474 | 4,744 | 4.6 | 12.9 | 8.7 | 4.9 | 5.6 | 5.3 | ||||||||||
| Rhythm Management | 526 | 552 | 1,078 | (1.2 | ) | 4.2 | 1.5 | (1.2 | ) | (2.9 | ) | (2.1 | ) | ||||||
| Electrophysiology | 375 | 444 | 819 | 25.4 | 23.4 | 24.3 | 25.4 | 15.7 | 20.1 | ||||||||||
| Heart Failure | 231 | 85 | 316 | (0.6 | ) | 22.5 | 4.7 | (0.6 | ) | 14.3 | 2.8 | ||||||||
| Vascular | 570 | 919 | 1,489 | (4.9 | ) | 10.2 | 3.9 | (4.0 | ) | 3.9 | 0.6 | ||||||||
| Structural Heart | 227 | 381 | 608 | 7.8 | 21.5 | 16.0 | 7.8 | 12.4 | 10.6 | ||||||||||
| Neuromodulation | 341 | 93 | 434 | 14.8 | 8.8 | 13.5 | 14.8 | 1.1 | 11.8 | ||||||||||
| Diabetes Care | 198 | 693 | 891 | 26.5 | 46.9 | 41.8 | 26.5 | 35.5 | 33.3 |
Worldwide Medical Devices sales increased 11.3 percent on a reported basis in the second quarter. On an organic basis, sales increased 8.2 percent. Refer to page 18 for a reconciliation of adjusted historical revenue.
Cardiovascular and Neuromodulation sales growth in the quarter was led by double-digit growth in Electrophysiology and Structural Heart.
In Electrophysiology, growth was led by strong performance in cardiac mapping and ablation as well as share gains from the recent U.S. launch of Abbott s Confirm Rx TM Insertable Cardiac Monitor (ICM), the world s first and only smartphone-compatible ICM designed to help physicians remotely identify cardiac arrhythmias. In May, Abbott announced U.S. FDA clearance of Advisor HD Grid Mapping Catheter, Sensor Enabled, which creates highly detailed maps of the heart and expands Abbott s leading electrophysiology product portfolio.
In Vascular, during the second quarter, Abbott received approval from the U.S. FDA for XIENCE Sierra, the newest generation of its gold-standard coronary stent system, which offers design and technology advances to provide an easier implant and greater ability to treat complex blockages. During the quarter, XIENCE Sierra also received national reimbursement in Japan to treat people with coronary artery disease.
In Diabetes Care, where sales increased 39.8 percent on a reported basis and 33.6 percent on an organic basis, growth was led by continued rapid market uptake of FreeStyle Libre, Abbott s revolutionary sensor-based continuous glucose monitoring (CGM) system, which removes the need for routine fingersticks 1 for people with diabetes.
ABBOTT S FULL-YEAR EARNINGS-PER-SHARE GUIDANCE
Abbott projects 2018 diluted earnings per share from continuing operations under Generally Accepted Accounting Principles (GAAP) of $1.34 to $1.40.
Abbott forecasts net specified items for the full year 2018 of approximately $1.51 per share. Specified items include intangible amortization expense, acquisition-related expenses, charges associated with cost reduction initiatives and other expenses.
Excluding specified items, projected adjusted diluted earnings per share from continuing operations would be $2.85 to $2.91 for the full year 2018.
Abbott is issuing third-quarter 2018 guidance for diluted earnings per share from continuing operations under GAAP of $0.32 to $0.34. Abbott forecasts specified items for the third quarter 2018 of $0.41 primarily related to intangible amortization, acquisition-related expenses, cost reduction initiatives and other expenses. Excluding specified items, projected adjusted diluted earnings per share from continuing operations would be $0.73 to $0.75 for the third quarter.
ABBOTT DECLARES 378 TH CONSECUTIVE QUARTERLY DIVIDEND
On June 8, 2018, the board of directors of Abbott declared the company s quarterly dividend of $0.28 per share. Abbott s cash dividend is payable Aug. 15, 2018, to shareholders of record at the close of business on July 13, 2018.
Abbott has increased its dividend payout for 46 consecutive years and is a member of the S&P 500 Dividend Aristocrats Index, which tracks companies that have annually increased their dividend for at least 25 consecutive years.
Abbott is a global healthcare company devoted to improving life through the development of products and technologies that span the breadth of healthcare. With a portfolio of leading, science-based offerings in diagnostics, medical devices, nutritionals and branded generic pharmaceuticals, Abbott serves people in more than 150 countries and employs approximately 99,000 people.
Visit Abbott at www.abbott.com and connect with us on Twitter at @AbbottNews.
Abbott will webcast its live second-quarter earnings conference call through its Investor Relations website at www.abbottinvestor.com at 8 a.m. Central time today. An archived edition of the webcast will be available later that day.
Private Securities Litigation Reform Act of 1995
A Caution Concerning Forward-Looking Statements
Some statements in this news release may be forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. Abbott cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated in the forward-looking statements. Economic, competitive, governmental, technological and other factors that may affect Abbott s operations are discussed in Item 1A, Risk Factors to our Annual Report on Securities and Exchange Commission Form 10-K for the year ended Dec. 31, 2017, and are incorporated by reference. Abbott undertakes no obligation to release publicly any revisions to forward-looking statements as a result of subsequent events or developments, except as required by law.
Abbott Financial:
Scott Leinenweber, 224-668-0791
Michael Comilla, 224-668-1872
Lukas Szot, 224-667-2299