Full Press Release Details
Abbott Reports Second-Quarter 2020 Results, Exceeds Analysts' Expectations
ABBOTT PARK, Ill., July 16, 2020 - Abbott today announced financial results for the second quarter ended June 30, 2020.
"Our diversified business model has proven to be a true strength during this time," said Robert B. Ford, president and chief executive officer, Abbott. "We're a leader in the global COVID-19 testing efforts, we've continued to advance our pipeline and, importantly, we saw significant improvements in growth trends throughout the quarter in the business areas that were initially most impacted by the pandemic."
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 impact of foreign exchange.
Following are sales by business segment and commentary for the second quarter 2020:
($ in millions)
| % Change vs. 2Q19 | |||||||||||||||||||||||||||||||||||
| Sales 2Q20 | Reported | Organic | |||||||||||||||||||||||||||||||||
| U.S. | Int'l | Total | U.S. | Int'l | Total | U.S. | Int'l | Total | |||||||||||||||||||||||||||
| Total * | 2,638 | 4,690 | 7,328 | (7.4 | ) | (8.6 | ) | (8.2 | ) | (7.4 | ) | (4.2 | ) | (5.4 | ) | ||||||||||||||||||||
| Nutrition | 808 | 1,075 | 1,883 | 2.9 | (1.4 | ) | 0.4 | 2.9 | 3.3 | 3.1 | |||||||||||||||||||||||||
| Diagnostics | 857 | 1,137 | 1,994 | 23.2 | (5.9 | ) | 4.7 | 23.2 | (2.2 | ) | 7.1 | ||||||||||||||||||||||||
| Established Pharmaceuticals | -- | 1,013 | 1,013 | n/a | (8.6 | ) | (8.6 | ) | n/a | (0.7 | ) | (0.7 | ) | ||||||||||||||||||||||
| Medical Devices | 966 | 1,457 | 2,423 | (29.0 | ) | (15.0 | ) | (21.2 | ) | (29.0 | ) | (12.7 | ) | (19.9 | ) |
* Total Q2 2020 Abbott sales from continuing operations include Other Sales of approximately $15 million.
| % Change vs. 1H19 | ||||||||||||||||||||||||||||||||||||
| Sales 1H20 | Reported | Organic | ||||||||||||||||||||||||||||||||||
| U.S. | Int'l | Total | U.S. | Int'l | Total | U.S. | Int'l | Total | ||||||||||||||||||||||||||||
| Total * | 5,494 | 9,560 | 15,054 | (1.9 | ) | (3.5 | ) | (3.0 | ) | (1.9 | ) | 0.0 | (0.7 | ) | ||||||||||||||||||||||
| Nutrition | 1,620 | 2,167 | 3,787 | 5.7 | 1.5 | 3.3 | 5.7 | 4.7 | 5.1 | |||||||||||||||||||||||||||
| Diagnostics | 1,660 | 2,160 | 3,820 | 16.9 | (7.1 | ) | 2.0 | 16.9 | (3.9 | ) | 4.0 | |||||||||||||||||||||||||
| Established Pharmaceuticals | -- | 2,057 | 2,057 | n/a | (2.1 | ) | (2.1 | ) | n/a | 4.0 | 4.0 | |||||||||||||||||||||||||
| Medical Devices | 2,199 | 3,161 | 5,360 | (16.6 | ) | (5.2 | ) | (10.2 | ) | (16.6 | ) | (2.7 | ) | (8.8 | ) |
* Total 1H 2020 Abbott sales from continuing operations include Other Sales of approximately $30 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 2020 worldwide sales of $7.3 billion decreased 8.2 percent on a reported basis. On an organic basis, worldwide sales decreased 5.4 percent. First-half 2020 worldwide sales of $15.1 billion decreased 3.0 percent on a reported basis and 0.7 percent on an organic basis.
($ in millions)
| % Change vs. 2Q19 | ||||||||||||||||||||||||||||||||||||
| Sales 2Q20 | Reported | Organic | ||||||||||||||||||||||||||||||||||
| U.S. | Int'l | Total | U.S. | Int'l | Total | U.S. | Int'l | Total | ||||||||||||||||||||||||||||
| Total | 808 | 1,075 | 1,883 | 2.9 | (1.4 | ) | 0.4 | 2.9 | 3.3 | 3.1 | ||||||||||||||||||||||||||
| Pediatric | 484 | 540 | 1,024 | 2.1 | (6.4 | ) | (2.6 | ) | 2.1 | (2.2 | ) | (0.3 | ) | |||||||||||||||||||||||
| Adult | 324 | 535 | 859 | 4.2 | 4.3 | 4.3 | 4.2 | 9.3 | 7.4 |
| % Change vs. 1H19 | |||||||||||||||||||||||||||||||||||||
| Sales 1H20 | Reported | Organic | |||||||||||||||||||||||||||||||||||
| U.S. | Int'l | Total | U.S. | Int'l | Total | U.S. | Int'l | Total | |||||||||||||||||||||||||||||
| Total | 1,620 | 2,167 | 3,787 | 5.7 | 1.5 | 3.3 | 5.7 | 4.7 | 5.1 | ||||||||||||||||||||||||||||
| Pediatric | 1,002 | 1,111 | 2,113 | 8.0 | (3.6 | ) | 1.6 | 8.0 | (1.0 | ) | 3.0 | ||||||||||||||||||||||||||
| Adult | 618 | 1,056 | 1,674 | 2.2 | 7.6 | 5.5 | 2.2 | 11.5 | 7.9 |
Worldwide Nutrition sales increased 0.4 percent on a reported basis and 3.1 percent on an organic basis in the second quarter. Strong U.S. and international sales performance of Ensure , Abbott's market-leading complete and balanced nutrition brand, led to global Adult Nutrition sales growth of 7.4 percent on an organic basis. In Pediatric Nutrition, sales were led by U.S. growth of Pedialyte , Abbott's oral rehydration brand, as well as growth in Southeast Asia, which were offset by challenging conditions in Greater China.
For the first half of 2020, worldwide Nutrition sales increased 3.3 percent on a reported basis and 5.1 percent on an organic basis, including organic sales growth of 3.0 percent in Pediatric Nutrition and 7.9 percent in Adult Nutrition.
($ in millions)
| % Change vs. 2Q19 | ||||||||||||||||||||||||||||||||||||
| Sales 2Q20 | Reported | Organic | ||||||||||||||||||||||||||||||||||
| U.S. | Int'l | Total | U.S. | Int'l | Total | U.S. | Int'l | Total | ||||||||||||||||||||||||||||
| Total | 857 | 1,137 | 1,994 | 23.2 | (5.9 | ) | 4.7 | 23.2 | (2.2 | ) | 7.1 | |||||||||||||||||||||||||
| Core Laboratory | 289 | 698 | 987 | 6.4 | (22.2 | ) | (15.5 | ) | 6.4 | (19.0 | ) | (13.1 | ) | |||||||||||||||||||||||
| Molecular | 144 | 215 | 359 | 276.7 | 209.9 | 233.6 | 276.7 | 222.1 | 241.4 | |||||||||||||||||||||||||||
| Point of Care | 79 | 39 | 118 | (30.6 | ) | 25.8 | (18.3 | ) | (30.6 | ) | 29.0 | (17.6 | ) | |||||||||||||||||||||||
| Rapid Diagnostics | 345 | 185 | 530 | 26.9 | (12.6 | ) | 9.6 | 26.9 | (9.2 | ) | 11.0 |
| % Change vs. 1H19 | ||||||||||||||||||||||||||||||||||||
| Sales 1H20 | Reported | Organic | ||||||||||||||||||||||||||||||||||
| U.S. | Int'l | Total | U.S. | Int'l | Total | U.S. | Int'l | Total | ||||||||||||||||||||||||||||
| Total | 1,660 | 2,160 | 3,820 | 16.9 | (7.1 | ) | 2.0 | 16.9 | (3.9 | ) | 4.0 | |||||||||||||||||||||||||
| Core Laboratory | 556 | 1,420 | 1,976 | 6.7 | (16.9 | ) | (11.4 | ) | 6.7 | (14.0 | ) | (9.2 | ) | |||||||||||||||||||||||
| Molecular | 209 | 289 | 498 | 166.1 | 111.1 | 131.1 | 166.1 | 118.2 | 135.7 | |||||||||||||||||||||||||||
| Point of Care | 182 | 74 | 256 | (18.0 | ) | 28.9 | (8.4 | ) | (18.0 | ) | 31.4 | (7.8 | ) | |||||||||||||||||||||||
| Rapid Diagnostics | 713 | 377 | 1,090 | 19.3 | (10.9 | ) | 6.8 | 19.3 | (7.8 | ) | 8.1 |
Worldwide Diagnostics sales increased 4.7 percent on a reported basis in the second quarter, including an unfavorable 2.4 percent effect of foreign exchange, and increased 7.1 percent on an organic basis.
In Core Laboratory Diagnostics, lower routine diagnostics testing due to COVID-19 was partially offset by sales of Abbott's COVID-19 laboratory-based tests for the detection of the IgG antibody, which determines if someone was previously infected with the virus. Core Laboratory IgG antibody testing-related sales on Abbott's Architect and Alinity i platforms were $152 million in the quarter.
Molecular Diagnostics sales increased 233.6 percent on a reported basis and 241.4 percent on an organic basis in the second quarter. Strong growth was driven by demand for Abbott's laboratory-based molecular tests for COVID-19 on its m 2000 and Alinity m platforms. Molecular Diagnostics COVID-19 testing-related sales were $283 million in the quarter.
Rapid Diagnostics sales increased 9.6 percent on a reported basis and 11.0 percent on an organic basis in the second quarter. Lower base business sales were more than offset by strong demand for Abbott's point-of-care COVID-19 molecular test on its ID NOW platform. Rapid Diagnostics COVID-19 testing-related sales were $180 million in the quarter.
Established Pharmaceuticals
($ in millions)
| % Change vs. 2Q19 | ||||||||||||||||||||||||||||||||||
| Sales 2Q20 | Reported | Organic | ||||||||||||||||||||||||||||||||
| U.S. | Int'l | Total | U.S. | Int'l | Total | U.S. | Int'l | Total | ||||||||||||||||||||||||||
| Total | -- | 1,013 | 1,013 | n/a | (8.6 | ) | (8.6 | ) | n/a | (0.7 | ) | (0.7 | ) | |||||||||||||||||||||
| Key Emerging Markets | -- | 764 | 764 | n/a | (10.3 | ) | (10.3 | ) | n/a | (0.4 | ) | (0.4 | ) | |||||||||||||||||||||
| Other | -- | 249 | 249 | n/a | (2.6 | ) | (2.6 | ) | n/a | (1.5 | ) | (1.5 | ) |
| % Change vs. 1H19 | ||||||||||||||||||||||||||||||||||
| Sales 1H20 | Reported | Organic | ||||||||||||||||||||||||||||||||
| U.S. | Int'l | Total | U.S. | Int'l | Total | U.S. | Int'l | Total | ||||||||||||||||||||||||||
| Total | -- | 2,057 | 2,057 | n/a | (2.1 | ) | (2.1 | ) | n/a | 4.0 | 4.0 | |||||||||||||||||||||||
| Key Emerging Markets | -- | 1,577 | 1,577 | n/a | (1.7 | ) | (1.7 | ) | n/a | 5.9 | 5.9 | |||||||||||||||||||||||
| Other | -- | 480 | 480 | n/a | (3.1 | ) | (3.1 | ) | n/a | (2.1 | ) | (2.1 | ) |
Established Pharmaceuticals sales decreased 8.6 percent on a reported basis in the second quarter and decreased 0.7 percent on an organic basis. For the first half of 2020, Established Pharmaceuticals sales decreased 2.1 percent on a reported basis and increased 4.0 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 10.3 percent on a reported basis in the second quarter and decreased 0.4 percent on an organic basis. Sales growth in certain countries, including double-digit growth in China, was more than offset by lower demand due to the increased spread of COVID-19 across several emerging market countries, including Russia, Brazil and Colombia.
Medical Devices
($ in millions)
| % Change vs. 2Q19 | |||||||||||||||||||
| Sales 2Q20 | Reported | Organic | |||||||||||||||||
| U.S. | Int'l | Total | U.S. | Int'l | Total | U.S. | Int'l | Total | |||||||||||
| Total | 966 | 1,457 | 2,423 | (29.0 | ) | (15.0 | ) | (21.2 | ) | (29.0 | ) | (12.7 | ) | (19.9 | ) | ||||
| Rhythm Management | 185 | 216 | 401 | (32.2 | ) | (21.3 | ) | (26.7 | ) | (32.2 | ) | (19.2 | ) | (25.7 | ) | ||||
| Electrophysiology | 120 | 179 | 299 | (37.2 | ) | (25.8 | ) | (30.8 | ) | (37.2 | ) | (24.7 | ) | (30.2 | ) | ||||
| Heart Failure | 115 | 43 | 158 | (22.9 | ) | (15.2 | ) | (20.9 | ) | (22.9 | ) | (13.3 | ) | (20.4 | ) | ||||
| Vascular | 168 | 313 | 481 | (37.6 | ) | (31.9 | ) | (34.0 | ) | (37.6 | ) | (29.9 | ) | (32.7 | ) | ||||
| Structural Heart | 91 | 132 | 223 | (40.1 | ) | (34.2 | ) | (36.7 | ) | (40.1 | ) | (33.0 | ) | (36.0 | ) | ||||
| Neuromodulation | 85 | 21 | 106 | (49.2 | ) | (52.0 | ) | (49.8 | ) | (49.2 | ) | (50.3 | ) | (49.4 | ) | ||||
| Diabetes Care | 202 | 553 | 755 | 27.2 | 24.7 | 25.4 | 27.2 | 28.7 | 28.3 | ||||||||||
| Vascular Product Lines: | |||||||||||||||||||
| Coronary and Endovascular a | 155 | 311 | 466 | (36.5 | ) | (32.1 | ) | (33.6 | ) | (36.5 | ) | (30.0 | ) | (32.3 | ) |
| % Change vs. 1H19 | |||||||||||||||||||
| Sales 1H20 | Reported | Organic | |||||||||||||||||
| U.S. | Int'l | Total | U.S. | Int'l | Total | U.S. | Int'l | Total | |||||||||||
| Total | 2,199 | 3,161 | 5,360 | (16.6 | ) | (5.2 | ) | (10.2 | ) | (16.6 | ) | (2.7 | ) | (8.8 | ) | ||||
| Rhythm Management | 413 | 462 | 875 | (21.3 | ) | (14.0 | ) | (17.6 | ) | (21.3 | ) | (11.7 | ) | (16.4 | ) | ||||
| Electrophysiology | 284 | 403 | 687 | (22.2 | ) | (14.4 | ) | (17.8 | ) | (22.2 | ) | (12.9 | ) | (17.0 | ) | ||||
| Heart Failure | 267 | 94 | 361 | (8.6 | ) | 1.7 | (6.1 | ) | (8.6 | ) | 4.0 | (5.6 | ) | ||||||
| Vascular | 398 | 708 | 1,106 | (25.7 | ) | (21.6 | ) | (23.1 | ) | (25.7 | ) | (19.7 | ) | (21.9 | ) | ||||
| Structural Heart | 227 | 314 | 541 | (21.3 | ) | (19.1 | ) | (20.0 | ) | (21.3 | ) | (17.1 | ) | (18.9 | ) | ||||
| Neuromodulation | 222 | 61 | 283 | (30.7 | ) | (28.1 | ) | (30.1 | ) | (30.7 | ) | (25.2 | ) | (29.5 | ) | ||||
| Diabetes Care | 388 | 1,119 | 1,507 | 25.1 | 30.4 | 29.0 | 25.1 | 34.3 | 31.9 | ||||||||||
| Vascular Product Lines: | |||||||||||||||||||
| Coronary and Endovascular a | 366 | 703 | 1,069 | (23.6 | ) | (21.8 | ) | (22.4 | ) | (23.6 | ) | (19.8 | ) | (21.1 | ) |
Worldwide Medical Devices sales decreased 21.2 percent on a reported basis in the second quarter and decreased 19.9 percent on an organic basis. Sales growth was negatively impacted by reduced cardiovascular and neuromodulation procedure volumes due to COVID-19. Procedure volume trends improved significantly over the course of the second quarter as both demand for procedures and availability of healthcare resources began to return to more normalized levels.
In Diabetes Care, strong growth was led by FreeStyle Libre, which grew 36.8 percent on a reported basis and 39.9 percent on an organic basis versus the prior year. In June, Abbott announced U.S. FDA approval of FreeStyle Libre 2 as an integrated continuous glucose monitoring (iCGM) system for adults and children ages 4 and older with diabetes, achieving the highest level of accuracy and performance standards. 1 The FreeStyle Libre 2 system will be available in the coming weeks at participating pharmacies and durable medical equipment providers at the same price as the currently available FreeStyle Libre 14 day system.
Abbott's guidance for 2020
Abbott projects full-year 2020 diluted earnings per share from continuing operations under GAAP of at least $2.00. Abbott forecasts specified items for the full-year 2020 of $1.25 primarily related to intangible amortization, acquisition-related expenses, restructuring and cost reduction initiatives and other expenses. Excluding specified items, projected adjusted diluted earnings per share from continuing operations would be at least $3.25 for full-year 2020.
Abbott declares 386 th consecutive QUARTERLY DIVIDEND
On June 12, 2020, the board of directors of Abbott declared the company's quarterly dividend of $0.36 per share. Abbott's cash dividend is payable August 17, 2020, to shareholders of record at the close of business on July 15, 2020.
Abbott has increased its dividend payout for 48 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 107,000 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 8:30 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, including the impact of the COVID-19 pandemic on Abbott's operations and financial results, 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" in our Annual Report on Form 10-K for the year ended Dec. 31, 2019 and in Item 1A, "Risk Factors" in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, and are incorporated herein 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 | |
| Abbott Media: Darcy Ross, 224-667-3655 |
1 Based on FDA iCGM special controls.
Abbott Laboratories and Subsidiaries
Condensed Consolidated Statement of Earnings
Second Quarter Ended June 30, 2020 and 2019
(in millions, except per share data)
| 2Q20 | 2Q19 | % Change | |||||||||
| Net Sales | $ | 7,328 | $ | 7,979 | (8.2) | ||||||
| Cost of products sold, excluding amortization expense | 3,263 | 3,279 | (0.5) | ||||||||
| Amortization of intangible assets | 553 | 483 | 14.7 | ||||||||
| Research and development | 564 | 577 | (2.1) | ||||||||
| Selling, general, and administrative | 2,276 | 2,434 | (6.5) | ||||||||
| Total Operating Cost and Expenses | 6,656 | 6,773 | (1.7) | ||||||||
| Operating Earnings | 672 | 1,206 | (44.3) | ||||||||
| Interest expense, net | 125 | 146 | (15.3) | ||||||||
| Net foreign exchange (gain) loss | (1 | ) | (4 | ) | (81.2) | ||||||
| Other (income) expense, net | 22 | (38 | ) | n/m | |||||||
| Earnings from Continuing Operations before taxes | 526 | 1,102 | (52.3) | ||||||||
| Tax expense (benefit) on Earnings from Continuing Operations | (11 | ) | 96 | n/m | 1) | ||||||
| Earnings from Continuing Operations | 537 | 1,006 | (46.6) | ||||||||
| Earnings from Discontinued Operations, net of taxes | -- | -- | n/m | ||||||||
| Net Earnings | $ | 537 | $ | 1,006 | (46.6) | ||||||
| Earnings from Continuing Operations, excluding | |||||||||||
| Specified Items, as described below | $ | 1,018 | $ | 1,465 | (30.5) | 2) | |||||
| Diluted Earnings per Common Share from: | |||||||||||
| Continuing Operations | $ | 0.30 | $ | 0.56 | (46.4) | ||||||
| Discontinued Operations | -- | -- | n/m | ||||||||
| Total | $ | 0.30 | $ | 0.56 | (46.4) | ||||||
| Diluted Earnings per Common Share from Continuing Operations, excluding Specified Items, as described below | $ | 0.57 | $ | 0.82 | (30.5) | 2) | |||||
| Average Number of Common Shares Outstanding Plus Dilutive Common Stock Options | 1,785 | 1,781 |
See tables on page 13 for an explanation of certain non-GAAP financial information.
n/m = Percent change is not meaningful.
See footnotes on the following page.
2019 Net Earnings and Diluted Earnings per Common Share from Continuing Operations, excluding Specified Items, excludes net after-tax charges of $459 million, or $0.26 per share, for intangible amortization expense and other expenses primarily associated with acquisitions and restructuring actions.
Abbott Laboratories and Subsidiaries
Condensed Consolidated Statement of Earnings
First Half Ended June 30, 2020 and 2019
(in millions, except per share data)
| 1H20 | 1H19 | % Change | |||||||||
| Net Sales | $ | 15,054 | $ | 15,514 | (3.0) | ||||||
| Cost of products sold, excluding amortization expense | 6,544 | 6,439 | 1.6 | ||||||||
| Amortization of intangible assets | 1,114 | 969 | 15.0 | ||||||||
| Research and development | 1,142 | 1,249 | (8.6) | 1) | |||||||
| Selling, general, and administrative | 4,824 | 4,912 | (1.8) | ||||||||
| Total Operating Cost and Expenses | 13,624 | 13,569 | 0.4 | ||||||||
| Operating Earnings | 1,430 | 1,945 | (26.5) | ||||||||
| Interest expense, net | 246 | 294 | (16.5) | ||||||||
| Net foreign exchange (gain) loss | 4 | 2 | n/m | ||||||||
| Other (income) expense, net | 21 | (85 | ) | n/m | |||||||
| Earnings from Continuing Operations before taxes | 1,159 | 1,734 | (33.2) | ||||||||
| Tax expense (benefit) on Earnings from Continuing Operations | 78 | 56 | 40.3 | 2) | |||||||
| Earnings from Continuing Operations | 1,081 | 1,678 | (35.6) | ||||||||
| Earnings from Discontinued Operations, net of taxes | 20 | -- | n/m | ||||||||
| Net Earnings | $ | 1,101 | $ | 1,678 | (34.4) | ||||||
| Earnings from Continuing Operations, excluding Specified Items, as described below | $ | 2,180 | $ | 2,591 | (15.8) | 3) | |||||
| Diluted Earnings per Common Share from: | |||||||||||
| Continuing Operations | $ | 0.60 | $ | 0.94 | (36.2) | ||||||
| Discontinued Operations | 0.01 | -- | n/m | ||||||||
| Total | $ | 0.61 | $ | 0.94 | (35.1) | ||||||
| Diluted Earnings per Common Share from Continuing Operations, excluding Specified Items, as described below | $ | 1.22 | $ | 1.45 | (15.9) | 3) | |||||
| Average Number of Common Shares Outstanding Plus Dilutive Common Stock Options | 1,783 | 1,779 |
See tables on page 14 for an explanation of certain non-GAAP financial information.
n/m = Percent change is not meaningful.
See footnotes on the following page.
2019 Tax expense (benefit) on Earnings from Continuing Operations includes the impact of a $78 million reduction of the transition tax associated with the Tax Cuts and Jobs Act (TCJA) and approximately $90 million in excess tax benefits associated with share-based compensation.
2019 Net Earnings and Diluted Earnings per Common Share from Continuing Operations, excluding Specified Items, excludes net after-tax charges of $913 million, or $0.51 per share, for intangible amortization expense and other expenses primarily associated with acquisitions and restructuring actions.
Abbott Laboratories and Subsidiaries
Non-GAAP Reconciliation of Financial Information From Continuing Operations
Second Quarter Ended June 30, 2020 and 2019
(in millions, except per share data)
| 2Q20 | |||||||||||||
| As Reported (GAAP) | Specified Items | As Adjusted | % to Sales | ||||||||||
| Intangible Amortization | $ | 553 | $ | (553 | ) | $ | -- | ||||||
| Gross Margin | 3,512 | 591 | 4,103 | 56.0 | % | ||||||||
| R&D | 564 | (28 | ) | 536 | 7.3 | % | |||||||
| SG&A | 2,276 | (24 | ) | 2,252 | 30.7 | % | |||||||
| Other (income) expense, net | 22 | (68 | ) | (46 | ) | ||||||||
| Earnings from Continuing Operations before taxes | 526 | 711 | 1,237 | ||||||||||
| Tax expense (benefit) on Earnings from Continuing Operations | (11 | ) | 230 | 219 | |||||||||
| Earnings from Continuing Operations | 537 | 481 | 1,018 | ||||||||||
| Diluted Earnings per Share from Continuing Operations | $ | 0.30 | $ | 0.27 | $ | 0.57 |
Specified items reflect intangible amortization expense of $553 million and other expenses of $158 million, primarily associated with acquisitions, restructuring actions and other expenses. See page 16 for additional details regarding specified items.
| 2Q19 | |||||||||||||
| As Reported (GAAP) | Specified Items | As Adjusted | % to Sales | ||||||||||
| Intangible Amortization | $ | 483 | $ | (483 | ) | $ | -- | ||||||
| Gross Margin | 4,217 | 522 | 4,739 | 59.4 | % | ||||||||
| R&D | 577 | (12 | ) | 565 | 7.1 | % | |||||||
| SG&A | 2,434 | (46 | ) | 2,388 | 29.9 | % | |||||||
| Other (income) expense, net | (38 | ) | (16 | ) | (54 | ) | |||||||
| Earnings from Continuing Operations before taxes | 1,102 | 596 | 1,698 | ||||||||||
| Tax expense (benefit) on Earnings from Continuing Operations | 96 | 137 | 233 | ||||||||||
| Earnings from Continuing Operations | 1,006 | 459 | 1,465 | ||||||||||
| Diluted Earnings per Share from Continuing Operations | $ | 0.56 | $ | 0.26 | $ | 0.82 |
Specified items reflect intangible amortization expense of $483 million and other expenses of $113 million, primarily associated with acquisitions, restructuring actions and other expenses. See page 17 for additional details regarding specified items.
Abbott Laboratories and Subsidiaries
Non-GAAP Reconciliation of Financial Information From Continuing Operations