Full Press Release Details
Abbott Reports Second-Quarter 2019 Results
Accelerated and sustainable growth driven by strong performance across portfolio
Raising full-year guidance for organic sales growth to 7 to 8 percent
Double-digit EPS growth exceeded expectations; raising full-year forecast
Long-term growth drivers FreeStyle Libre, MitraClip and Alinity achieving exceptional growth
ABBOTT PARK, Ill., July 17, 2019 Abbott today announced financial results for the second quarter ended June 30, 2019.
Second-quarter worldwide sales of $8.0 billion increased 2.7 percent on a reported basis and 7.5 percent on an organic* basis.
Reported diluted EPS from continuing operations under GAAP was $0.56 in the second quarter.
Adjusted diluted EPS from continuing operations, which excludes specified items, was $0.82, above the previous guidance range.
Abbott is raising its full-year 2019 outlook. Abbott projects organic sales growth of 7.0 to 8.0 percent 1 , diluted EPS from continuing operations on a GAAP basis of $2.06 to $2.12, and full-year adjusted diluted EPS from continuing operations of $3.21 to $3.27, reflecting double-digit growth.
FreeStyle Libre , Abbott s revolutionary continuous glucose monitoring system, achieved worldwide sales of $433 million in the quarter, an increase of 63.9 percent on a reported basis and 72.9 percent on an organic basis versus the prior year. In the U.S., FreeStyle Libre is now reimbursed for approximately 75 percent of people with private pharmacy benefit insurance.
Worldwide sales of MitraClip were $169 million in the quarter, an increase of 26.7 percent on a reported basis and 30.6 percent on an organic basis versus the prior year, including U.S. growth of 56.1 percent. Earlier this week, Abbott announced U.S. FDA approval of its next-generation MitraClip device, which offers enhancements and more sizes to offer doctors further options.
In July, Abbott received U.S. FDA approval for its Alinity -S diagnostics system, the latest technology for screening and protecting the U.S. blood and plasma supply. Alinity-S is designed to provide faster and more efficient results within a smaller space versus commercially available competitive systems, while maintaining the highest levels of accuracy.
Our sales growth accelerated and is sustainable, said Miles D. White, chairman and chief executive officer, Abbott. We have great momentum and are raising our guidance above the strong outlook we previously set for the year.
* See note on organic growth on the next page.
SECOND-QUARTER BUSINESS OVERVIEW
Note: Management believes that measuring sales growth rates on an organic basis is an appropriate way for investors to best understand the underlying performance of the business.
Organic sales growth:
Excludes the prior year first and second-quarter results for a non-core business within U.S. Adult Nutrition, which was discontinued during the third quarter 2018; and
Excludes the impact of foreign exchange.
Following are sales by business segment and commentary for the second quarter:
($ in millions)
| % Change vs. 2Q18 | |||||||||||||||||||
| Sales 2Q19 | Reported | Organic | |||||||||||||||||
| U.S. | Int l | Total | U.S. | Int l | Total | U.S. | Int l | Total | |||||||||||
| Total * | 2,850 | 5,129 | 7,979 | 5.5 | 1.3 | 2.7 | 6.0 | 8.3 | 7.5 | ||||||||||
| Nutrition | 786 | 1,089 | 1,875 | 0.7 | 1.1 | 0.9 | 2.3 | 7.0 | 5.1 | ||||||||||
| Diagnostics | 695 | 1,210 | 1,905 | 6.7 | (0.9 | ) | 1.7 | 6.7 | 6.0 | 6.2 | |||||||||
| Established Pharmaceuticals | 1,108 | 1,108 | n/a | (1.8 | ) | (1.8 | ) | n/a | 6.1 | 6.1 | |||||||||
| Medical Devices | 1,360 | 1,715 | 3,075 | 8.0 | 5.1 | 6.4 | 8.0 | 12.4 | 10.5 |
* Total Q2 2019 Abbott sales from continuing operations include Other Sales of $16 million.
| % Change vs. 1H18 | |||||||||||||||||||
| Sales 1H19 | Reported | Organic | |||||||||||||||||
| U.S. | Int l | Total | U.S. | Int l | Total | U.S. | Int l | Total | |||||||||||
| Total * | 5,604 | 9,910 | 15,514 | 4.2 | 1.3 | 2.4 | 4.8 | 8.6 | 7.3 | ||||||||||
| Nutrition | 1,533 | 2,134 | 3,667 | (0.4 | ) | 2.8 | 1.5 | 1.6 | 9.0 | 5.9 | |||||||||
| Diagnostics | 1,419 | 2,327 | 3,746 | 4.9 | (1.3 | ) | 1.0 | 4.9 | 5.5 | 5.3 | |||||||||
| Established Pharmaceuticals | 2,100 | 2,100 | n/a | (3.3 | ) | (3.3 | ) | n/a | 5.7 | 5.7 | |||||||||
| Medical Devices | 2,635 | 3,335 | 5,970 | 6.8 | 5.3 | 5.9 | 6.8 | 12.5 | 10.0 |
* Total 1H 2019 Abbott sales from continuing operations include Other Sales of $31 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 2019 worldwide sales of $8.0 billion increased 2.7 percent on a reported basis. On an organic basis, worldwide sales increased 7.5 percent. Refer to pages 17 and 18 for a reconciliation of adjusted historical revenue.
($ in millions)
| % Change vs. 2Q18 | |||||||||||||||||||
| Sales 2Q19 | Reported | Organic | |||||||||||||||||
| U.S. | Int l | Total | U.S. | Int l | Total | U.S. | Int l | Total | |||||||||||
| Total | 786 | 1,089 | 1,875 | 0.7 | 1.1 | 0.9 | 2.3 | 7.0 | 5.1 | ||||||||||
| Pediatric | 475 | 576 | 1,051 | 1.3 | (0.8 | ) | 0.1 | 1.3 | 4.2 | 2.9 | |||||||||
| Adult | 311 | 513 | 824 | (0.2 | ) | 3.4 | 2.0 | 3.9 | 10.4 | 7.9 |
| % Change vs. 1H18 | |||||||||||||||||||
| Sales 1H19 | Reported | Organic | |||||||||||||||||
| U.S. | Int l | Total | U.S. | Int l | Total | U.S. | Int l | Total | |||||||||||
| Total | 1,533 | 2,134 | 3,667 | (0.4 | ) | 2.8 | 1.5 | 1.6 | 9.0 | 5.9 | |||||||||
| Pediatric | 928 | 1,152 | 2,080 | 1.2 | 2.2 | 1.8 | 1.2 | 7.6 | 4.7 | ||||||||||
| Adult | 605 | 982 | 1,587 | (2.8 | ) | 3.6 | 1.1 | 2.1 | 10.7 | 7.4 |
Worldwide Nutrition sales increased 0.9 percent on a reported basis in the second quarter. On an organic basis, sales increased 5.1 percent. Refer to pages 17 and 18 for a reconciliation of adjusted historical revenue.
Worldwide Pediatric Nutrition sales increased 0.1 percent on a reported basis in the second quarter, including an unfavorable 2.8 percent effect of foreign exchange, and increased 2.9 percent on an organic basis. Sales performance in the quarter was led by broad-based growth across several brands, and included above-market growth in several countries in Latin America and Asia.
Worldwide Adult Nutrition sales increased 2.0 percent on a reported basis in the second quarter and increased 7.9 percent on an organic basis. International Adult Nutrition sales increased 3.4 percent on a reported basis and 10.4 percent on an organic basis in the second quarter. Sales performance in the quarter 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. 2Q18 | |||||||||||||||||||
| Sales 2Q19 | Reported | Organic | |||||||||||||||||
| U.S. | Int l | Total | U.S. | Int l | Total | U.S. | Int l | Total | |||||||||||
| Total | 695 | 1,210 | 1,905 | 6.7 | (0.9 | ) | 1.7 | 6.7 | 6.0 | 6.2 | |||||||||
| Core Laboratory | 272 | 897 | 1,169 | 9.7 | 1.9 | 3.6 | 9.7 | 9.3 | 9.4 | ||||||||||
| Molecular | 38 | 69 | 107 | (0.9 | ) | (17.7 | ) | (12.4 | ) | (0.9 | ) | (13.2 | ) | (9.3 | ) | ||||
| Point of Care | 113 | 32 | 145 | 5.3 | 4.0 | 5.0 | 5.3 | 6.9 | 5.7 | ||||||||||
| Rapid Diagnostics | 272 | 212 | 484 | 5.4 | (6.3 | ) | (0.1 | ) | 5.4 | (0.1 | ) | 2.8 |
| % Change vs. 1H18 | |||||||||||||||||||
| Sales 1H19 | Reported | Organic | |||||||||||||||||
| U.S. | Int l | Total | U.S. | Int l | Total | U.S. | Int l | Total | |||||||||||
| Total | 1,419 | 2,327 | 3,746 | 4.9 | (1.3 | ) | 1.0 | 4.9 | 5.5 | 5.3 | |||||||||
| Core Laboratory | 521 | 1,709 | 2,230 | 9.5 | 2.3 | 3.9 | 9.5 | 9.7 | 9.6 | ||||||||||
| Molecular | 78 | 137 | 215 | 1.6 | (16.2 | ) | (10.4 | ) | 1.6 | (11.5 | ) | (7.3 | ) | ||||||
| Point of Care | 222 | 58 | 280 | 1.8 | (6.1 | ) | 0.1 | 1.8 | (3.2 | ) | 0.7 | ||||||||
| Rapid Diagnostics | 598 | 423 | 1,021 | 2.7 | (8.3 | ) | (2.2 | ) | 2.7 | (2.2 | ) | 0.6 |
Worldwide Diagnostics sales increased 1.7 percent on a reported basis in the second quarter, including an unfavorable 4.5 percent effect of foreign exchange, and increased 6.2 percent on an organic basis.
Core Laboratory Diagnostics sales increased 3.6 percent on a reported basis and 9.4 percent on an organic basis in the second quarter. Sales performance in the quarter was led by above-market growth internationally, where Abbott is achieving continued strong adoption of its Alinity family of innovative and highly differentiated diagnostic instruments. In July, Abbott received U.S. FDA approval for its Alinity-S (blood and plasma screening) diagnostics system and several testing assays, designed to provide faster and more efficient results within a smaller space, while maintaining the highest levels of accuracy.
Molecular Diagnostics sales decreased 12.4 percent on a reported basis in the second quarter, including an unfavorable 3.1 percent effect of foreign exchange, and decreased 9.3 percent on an organic basis. As expected, sales growth in the quarter was negatively impacted by non-governmental organization (NGO) purchasing patterns in Africa.
Point of Care Diagnostics sales increased 5.0 percent on a reported basis in the second quarter, including an unfavorable 0.7 percent effect of foreign exchange, and increased 5.7 percent on an organic basis. Sales growth was led by Abbott s market-leading i-STAT handheld system in the U.S. and internationally.
Rapid Diagnostics sales decreased 0.1 percent on a reported basis in the second quarter, including an unfavorable 2.9 percent effect of foreign exchange, and increased 2.8 percent on an organic basis. Organic sales growth was led by infectious disease testing in developed markets and cardio-metabolic testing globally.
Established Pharmaceuticals
($ in millions)
| % Change vs. 2Q18 | |||||||||||||||||||
| Sales 2Q19 | Reported | Organic | |||||||||||||||||
| U.S. | Int l | Total | U.S. | Int l | Total | U.S. | Int l | Total | |||||||||||
| Total | 1,108 | 1,108 | n/a | (1.8 | ) | (1.8 | ) | n/a | 6.1 | 6.1 | |||||||||
| Key Emerging Markets | 853 | 853 | n/a | (1.4 | ) | (1.4 | ) | n/a | 7.9 | 7.9 | |||||||||
| Other | 255 | 255 | n/a | (3.1 | ) | (3.1 | ) | n/a | 0.1 | 0.1 |
| % Change vs. 1H18 | |||||||||||||||||||
| Sales 1H19 | Reported | Organic | |||||||||||||||||
| U.S. | Int l | Total | U.S. | Int l | Total | U.S. | Int l | Total | |||||||||||
| Total | 2,100 | 2,100 | n/a | (3.3 | ) | (3.3 | ) | n/a | 5.7 | 5.7 | |||||||||
| Key Emerging Markets | 1,605 | 1,605 | n/a | (3.2 | ) | (3.2 | ) | n/a | 7.6 | 7.6 | |||||||||
| Other | 495 | 495 | n/a | (3.6 | ) | (3.6 | ) | n/a | (0.4 | ) | (0.4 | ) |
Established Pharmaceuticals sales decreased 1.8 percent on a reported basis in the second quarter, including an unfavorable 7.9 percent effect of foreign exchange, and increased 6.1 percent on an organic basis.
Key Emerging Markets include India, Brazil, Russia and China along with several additional emerging countries that represent the most attractive long-term growth opportunities for Abbott s branded generics product portfolio. Sales in these geographies decreased 1.4 percent on a reported basis in the second quarter, including an unfavorable 9.3 percent effect of foreign exchange, and increased 7.9 percent on an organic basis, which was led by strong growth across several countries, including India and China.
Other sales decreased 3.1 percent on a reported basis in the second quarter, including an unfavorable 3.2 percent effect of foreign exchange, and increased 0.1 percent on an organic basis. As expected, Other sales growth was negatively impacted in the quarter by the recent discontinuation of a non-core, low-margin supply agreement.
Medical Devices
($ in millions)
| % Change vs. 2Q18 | |||||||||||||||||||
| Sales 2Q19 | Reported | Organic | |||||||||||||||||
| U.S. | Int l | Total | U.S. | Int l | Total | U.S. | Int l | Total | |||||||||||
| Total | 1,360 | 1,715 | 3,075 | 8.0 | 5.1 | 6.4 | 8.0 | 12.4 | 10.5 | ||||||||||
| Cardiovascular and Neuromodulation | 1,202 | 1,271 | 2,473 | 4.7 | (0.2 | ) | 2.1 | 4.7 | 6.5 | 5.6 | |||||||||
| Rhythm Management | 273 | 275 | 548 | (4.4 | ) | (3.8 | ) | (4.1 | ) | (4.4 | ) | 3.3 | (0.6 | ) | |||||
| Electrophysiology | 190 | 240 | 430 | 11.4 | 4.9 | 7.6 | 11.4 | 11.4 | 11.4 | ||||||||||
| Heart Failure | 149 | 52 | 201 | 27.1 | 12.0 | 22.8 | 27.1 | 18.2 | 24.6 | ||||||||||
| Vascular | 270 | 460 | 730 | (4.9 | ) | (1.3 | ) | (2.7 | ) | (4.9 | ) | 4.8 | 1.1 | ||||||
| Structural Heart | 152 | 200 | 352 | 29.0 | 1.7 | 11.9 | 29.0 | 9.1 | 16.6 | ||||||||||
| Neuromodulation | 168 | 44 | 212 | (3.0 | ) | (10.4 | ) | (4.6 | ) | (3.0 | ) | (3.1 | ) | (3.0 | ) | ||||
| Diabetes Care | 158 | 444 | 602 | 42.1 | 23.9 | 28.2 | 42.1 | 33.1 | 35.3 | ||||||||||
| Vascular Product Lines: | |||||||||||||||||||
| Coronary and Endovascular a) | 244 | 459 | 703 | (2.4 | ) | (0.8 | ) | (1.3 | ) | (2.4 | ) | 5.4 | 2.7 |
a) Includes drug-eluting stents, balloon catheters, guidewires, vascular imaging/diagnostics products, vessel closure, carotid and other coronary and peripheral products.
| % Change vs. 1H18 | |||||||||||||||||||
| Sales 1H19 | Reported | Organic | |||||||||||||||||
| U.S. | Int l | Total | U.S. | Int l | Total | U.S. | Int l | Total | |||||||||||
| Total | 2,635 | 3,335 | 5,970 | 6.8 | 5.3 | 5.9 | 6.8 | 12.5 | 10.0 | ||||||||||
| Cardiovascular and Neuromodulation | 2,325 | 2,477 | 4,802 | 2.4 | 0.1 | 1.2 | 2.4 | 6.7 | 4.6 | ||||||||||
| Rhythm Management | 525 | 537 | 1,062 | (8.3 | ) | (4.4 | ) | (6.4 | ) | (8.3 | ) | 2.4 | (3.0 | ) | |||||
| Electrophysiology | 364 | 471 | 835 | 10.2 | 8.8 | 9.4 | 10.2 | 15.1 | 13.0 | ||||||||||
| Heart Failure | 292 | 93 | 385 | 26.6 | 9.1 | 21.9 | 26.6 | 15.5 | 23.6 | ||||||||||
| Vascular | 536 | 903 | 1,439 | (5.9 | ) | (1.8 | ) | (3.4 | ) | (5.9 | ) | 4.3 | 0.4 | ||||||
| Structural Heart | 288 | 388 | 676 | 27.0 | 1.7 | 11.2 | 27.0 | 9.2 | 15.8 | ||||||||||
| Neuromodulation | 320 | 85 | 405 | (6.2 | ) | (8.4 | ) | (6.7 | ) | (6.2 | ) | (0.6 | ) | (5.0 | ) | ||||
| Diabetes Care | 310 | 858 | 1,168 | 57.1 | 23.8 | 31.2 | 57.1 | 33.1 | 38.4 | ||||||||||
| Vascular Product Lines: | |||||||||||||||||||
| Coronary and Endovascular a) | 479 | 899 | 1,378 | (2.5 | ) | (1.4 | ) | (1.8 | ) | (2.5 | ) | 4.6 | 2.1 |
a) Includes drug-eluting stents, balloon catheters, guidewires, vascular imaging/diagnostics products, vessel closure, carotid and other coronary and peripheral products.
Note: Insertable Cardiac Monitor (ICM) sales, which had previously been reported in Electrophysiology, are now included in Rhythm Management. Historical periods have been adjusted to reflect this change.
Worldwide Medical Devices sales increased 6.4 percent on a reported basis in the second quarter and increased 10.5 percent on an organic basis, led by double-digit growth in Electrophysiology, Heart Failure, Structural Heart and Diabetes Care.
In Electrophysiology, growth was led by strong performance in cardiac diagnostic and ablation catheters, which are used to help physicians accurately and effectively treat atrial fibrillation, a form of irregular heartbeat.
In Heart Failure, growth was driven by market adoption of Abbott s HeartMate 3 left ventricular assist device following U.S. FDA approval as a destination (long-term use) therapy in late-2018.
Growth in Structural Heart was led by MitraClip, Abbott s market-leading device for the minimally invasive treatment of mitral regurgitation (backflow of blood through a leaky mitral heart valve). Earlier this year, Abbott received U.S. FDA approval for a new, expanded indication for MitraClip to treat clinically significant secondary mitral regurgitation as a result of underlying heart failure. This new indication significantly expands the number of people that can be treated with MitraClip. Earlier this week, Abbott announced U.S. FDA approval of its next-generation MitraClip device, MitraClip G4, which offers an expanded range of clip sizes, an alternative leaflet grasping feature and facilitation of procedure assessment in real time to offer doctors further options when treating mitral valve disease.
In Diabetes Care, sales increased 28.2 percent on a reported basis and 35.3 percent on an organic basis in the second quarter. Sales growth in the quarter was led by FreeStyle Libre, Abbott s revolutionary continuous glucose monitoring system, with worldwide sales of $433 million, an increase of 63.9 percent on a reported basis and 72.9 percent on an organic basis versus the prior year.
ABBOTT S GUIDANCE FOR 2019
Abbott projects 2019 organic sales growth of 7.0 to 8.0 percent 1 , and diluted earnings per share from continuing operations under Generally Accepted Accounting Principles (GAAP) of $2.06 to $2.12. Abbott forecasts net specified items for the full year 2019 of $1.15 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 $3.21 to $3.27 for the full year 2019.
Abbott is issuing third-quarter 2019 guidance for diluted earnings per share from continuing operations under GAAP of $0.53 to $0.55. Abbott forecasts specified items for the third quarter 2019 of $0.30 per share 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 $0.83 to $0.85 for the third quarter.
ABBOTT DECLARES 382 ND CONSECUTIVE QUARTERLY DIVIDEND
On June 14, 2019, the board of directors of Abbott declared the company s quarterly dividend of $0.32 per share. Abbott s cash dividend is payable Aug. 15, 2019, to shareholders of record at the close of business on July 15, 2019.
Abbott has increased its dividend payout for 47 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 leader that helps people live more fully at all stages of life. Our portfolio of life-changing technologies spans the spectrum of healthcare, with leading businesses and products in diagnostics, medical devices, nutritionals and branded generic medicines. Our 103,000 colleagues serve people in more than 160 countries.
Connect with us at www.abbott.com, on LinkedIn at www.linkedin.com/company/abbott-/, on Facebook at www.facebook.com/Abbott and on Twitter @AbbottNews and @AbbottGlobal.
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, 2018, 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
Laura Dauer, 224-667-2299
Darcy Ross, 224-667-3655
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