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Abbott Reports Second-Quarter 2022 Results and Raises Full-Year EPS Guidance Abbott (NYSE: ABT) today announced financial results for the second quarter ended June 30, 2022. Second-quarter sales of $11.3 billion increased 10.1 ...

Wednesday, July 20, 2022 6 min read
Key Takeaway: ABBOTT PARK , Ill. , July 20, 2022 /PRNewswire/ -- Abbott (NYSE: ABT ) today announced financial results for the second quarter ended June 30, 2022 . "We achieved another quarter of strong growth and are raising our full-year EPS guidance," said Robert B. Ford , chairman and chi

Full Press Release Details

ABBOTT PARK , Ill. , July 20, 2022 /PRNewswire/ -- Abbott (NYSE: ABT ) today announced financial results for the second quarter ended June 30, 2022 .
"We achieved another quarter of strong growth and are raising our full-year EPS guidance," said Robert B. Ford , chairman and chief executive officer, Abbott. "Our new product pipeline has remained highly productive, and our diversified business has continued to be resilient in a challenging macro environment."
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 2022:
Total Company ($ in millions)
% Change vs. 2Q21
Sales 2Q22 Reported Organic
U.S. Int'l Total U.S. Int'l Total U.S. Int'l Total
Total * 4,892 6,365 11,257 36.6 (4.2) 10.1 36.6 2.3 14.3
Nutrition 761 1,192 1,953 (12.9) (3.5) (7.4) (12.9) 1.5 (4.5)
Diagnostics 2,469 1,853 4,322 113.8 (11.4) 33.1 113.8 (5.6) 36.9
Established Pharmaceuticals -- 1,223 1,223 n/a 3.7 3.7 n/a 9.2 9.2
Medical Devices 1,660 2,097 3,757 7.9 (1.5) 2.5 7.9 7.1 7.5
% Change vs. 1H21
Sales 1H22 Reported Organic
U.S. Int'l Total U.S. Int'l Total U.S. Int'l Total
Total * 9,829 13,323 23,152 32.5 0.5 12.0 32.5 6.7 15.9
Nutrition 1,438 2,409 3,847 (15.9) (1.1) (7.2) (15.9) 3.6 (4.4)
Diagnostics 5,210 4,398 9,608 86.4 (1.5) 32.3 86.4 4.3 35.9
Established Pharmaceuticals -- 2,370 2,370 n/a 5.3 5.3 n/a 11.2 11.2
Medical Devices 3,176 4,146 7,322 9.9 1.2 4.8 9.9 9.0 9.4
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 2022 worldwide sales of $11.3 billion increased 10.1 percent on a reported basis and 14.3 percent on an organic basis.
Worldwide sales, excluding COVID-19 testing-related sales, decreased 0.3 percent on a reported basis and increased 4.1 percent on an organic basis in the quarter. 4 Worldwide sales were negatively impacted by a voluntary recall and manufacturing shutdown initiated in February of certain infant formula products manufactured at one of Abbott's U.S. plants. Excluding COVID-19 testing-related sales and the U.S. sales associated with the recalled products in the current and prior years, total worldwide sales increased 1.6 percent on a reported basis and 6.2 percent on an organic basis in the second quarter. 5
Nutrition ($ in millions)
% Change vs. 2Q21
Sales 2Q22 Reported Organic
U.S. Int'l Total U.S. Int'l Total U.S. Int'l Total
Total 761 1,192 1,953 (12.9) (3.5) (7.4) (12.9) 1.5 (4.5)
Pediatric 413 512 925 (21.6) (9.5) (15.3) (21.6) (5.8) (13.4)
Adult 348 680 1,028 0.5 1.6 1.2 0.5 7.6 5.2
% Change vs. 1H21
Sales 1H22 Reported Organic
U.S. Int'l Total U.S. Int'l Total U.S. Int'l Total
Total 1,438 2,409 3,847 (15.9) (1.1) (7.2) (15.9) 3.6 (4.4)
Pediatric 751 1,021 1,772 (27.5) (9.1) (17.9) (27.5) (5.6) (16.1)
Adult 687 1,388 2,075 2.1 5.8 4.6 2.1 11.5 8.3
Worldwide Nutrition sales decreased 7.4 percent on a reported basis and 4.5 percent on an organic basis in the second quarter. Total worldwide Nutrition and Pediatric Nutrition sales were negatively impacted by a voluntary recall and manufacturing shutdown initiated in February of certain infant formula products manufactured at one of Abbott's U.S. plants. On July 1 , Abbott restarted partial production at the facility. Excluding the U.S. sales associated with these products in the current and prior years, total worldwide Nutrition sales increased 0.5 percent on a reported basis and 3.8 percent on an organic basis in the second quarter. 6
In Adult Nutrition, Ensure ® , Abbott's market-leading complete and balanced nutrition brand, and Glucerna ® , Abbott's market-leading diabetes nutrition brand, led to global sales growth of 1.2 percent on a reported basis and 5.2 percent on an organic basis.
Diagnostics ($ in millions)
% Change vs. 2Q21
Sales 2Q22 Reported Organic
U.S. Int'l Total U.S. Int'l Total U.S. Int'l Total
Total 2,469 1,853 4,322 113.8 (11.4) 33.1 113.8 (5.6) 36.9
Core Laboratory 287 934 1,221 1.3 (8.6) (6.5) 1.3 (2.0) (1.3)
Molecular 71 141 212 (23.7) (28.4) (26.9) (23.7) (24.4) (24.2)
Point of Care 101 38 139 3.2 (3.7) 1.2 3.2 0.3 2.4
Rapid Diagnostics 2,010 740 2,750 195.4 (11.2) 81.7 195.4 (5.8) 84.6
% Change vs. 1H21
Sales 1H22 Reported Organic
U.S. Int'l Total U.S. Int'l Total U.S. Int'l Total
Total 5,210 4,398 9,608 86.4 (1.5) 32.3 86.4 4.3 35.9
Core Laboratory 555 1,850 2,405 0.1 (4.3) (3.4) 0.1 1.7 1.3
Molecular 243 389 632 (9.4) (16.9) (14.2) (9.4) (12.4) (11.3)
Point of Care 192 75 267 1.2 (1.7) 0.4 1.2 2.0 1.4
Rapid Diagnostics 4,220 2,084 6,304 136.6 4.9 67.2 136.6 10.9 70.4
Worldwide Diagnostics sales increased 33.1 percent on a reported basis and 36.9 percent on an organic basis in the second quarter. Global COVID-19 testing-related sales were $2.3 billion in the quarter, led by sales of testing products in Rapid Diagnostics.
Sales in Core Laboratory and Molecular Diagnostics were impacted by year-over-year declines in COVID-19 testing-related sales in these businesses. Excluding COVID-19 testing-related sales, Core Laboratory Diagnostics sales decreased 3.1 percent on a reported basis and increased 2.3 percent on an organic basis and Molecular Diagnostics sales increased 17.9 percent on a reported basis and 22.3 percent on an organic basis in the second quarter. 7
Established Pharmaceuticals ($ in millions)
% Change vs. 2Q21
Sales 2Q22 Reported Organic
U.S. Int'l Total U.S. Int'l Total U.S. Int'l Total
Total -- 1,223 1,223 n/a 3.7 3.7 n/a 9.2 9.2
Key Emerging Markets -- 931 931 n/a 1.8 1.8 n/a 7.1 7.1
Other -- 292 292 n/a 10.3 10.3 n/a 16.7 16.7
% Change vs. 1H21
Sales 1H22 Reported Organic
U.S. Int'l Total U.S. Int'l Total U.S. Int'l Total
Total -- 2,370 2,370 n/a 5.3 5.3 n/a 11.2 11.2
Key Emerging Markets -- 1,833 1,833 n/a 5.6 5.6 n/a 11.8 11.8
Other -- 537 537 n/a 4.5 4.5 n/a 9.2 9.2
Established Pharmaceuticals sales increased 3.7 percent on a reported basis and 9.2 percent on an organic basis in the second quarter.
Key Emerging Markets include several emerging countries that represent the most attractive long-term growth opportunities for Abbott's branded generics product portfolio. Sales in these geographies increased 1.8 percent on a reported basis and 7.1 percent on an organic basis, led by double-digit growth on a reported and organic basis in several geographies and therapeutic areas, including cardiometabolic, respiratory and central nervous system/pain management.
Other sales increased 10.3 percent on a reported basis and 16.7 percent on an organic basis in the quarter.
Medical Devices ($ in millions)
% Change vs. 2Q21
Sales 2Q22 Reported Organic
U.S. Int'l Total U.S. Int'l Total U.S. Int'l Total
Total 1,660 2,097 3,757 7.9 (1.5) 2.5 7.9 7.1 7.5
Rhythm Management 264 284 548 (2.3) (4.4) (3.4) (2.3) 3.7 0.9
Electrophysiology 226 260 486 8.6 (6.8) (0.2) 8.6 2.2 5.0
Heart Failure 179 62 241 6.5 4.2 5.9 6.5 13.6 8.3
Vascular 228 425 653 (6.7) (5.8) (6.1) (6.7) 1.2 (1.6)
Structural Heart 207 233 440 8.1 0.9 4.2 8.1 11.4 9.9
Neuromodulation 157 40 197 (5.2) (8.7) (6.0) (5.2) 0.2 (4.1)
Diabetes Care 399 793 1,192 37.8 3.4 12.8 37.8 12.4 19.4
% Change vs. 1H21
Sales 1H22 Reported Organic
U.S. Int'l Total U.S. Int'l Total U.S. Int'l Total
Total 3,176 4,146 7,322 9.9 1.2 4.8 9.9 9.0 9.4
Rhythm Management 512 560 1,072 0.3 (2.7) (1.3) 0.3 4.4 2.5
Electrophysiology 442 529 971 14.0 (0.1) 5.8 14.0 8.0 10.5
Heart Failure 346 116 462 10.6 7.3 9.7 10.6 15.9 11.9
Vascular 437 835 1,272 (6.0) (3.7) (4.5) (6.0) 2.6 (0.4)
Structural Heart 397 454 851 10.4 3.4 6.5 10.4 12.8 11.7
Neuromodulation 300 76 376 (3.4) (9.1) (4.6) (3.4) (0.9) (2.9)
Diabetes Care 742 1,576 2,318 36.8 5.5 13.8 36.8 13.7 19.8
Worldwide Medical Devices sales increased 2.5 percent on a reported basis and 7.5 percent on an organic basis in the second quarter. Sales growth was negatively impacted by reduced cardiovascular and neuromodulation procedure volumes as a result of recent surges of COVID-19 in several geographies, healthcare staffing challenges and lockdowns in China that were implemented to control the spread of the virus.
In Diabetes Care, FreeStyle Libre sales were approximately $1.1 billion in the quarter, which represents sales growth of 18.7 percent on a reported basis and 25.6 percent on an organic basis.
ABBOTT'S EARNINGS-PER-SHARE GUIDANCE Abbott is raising its projected full-year 2022 diluted earnings per share under GAAP to at least $3.50 . Abbott forecasts specified items for the full-year 2022 of $1.40 per share primarily related to intangible amortization, costs related to a voluntary recall, expenses associated with acquisitions, restructurings and cost reduction initiatives and other net expenses. Excluding specified items, Abbott is raising its projected adjusted diluted earnings per share to at least $4.90 for the full-year 2022.
ABBOTT DECLARES 394 TH CONSECUTIVE QUARTERLY DIVIDEND On June 10, 2022 , the board of directors of Abbott declared the company's quarterly dividend of $0.47 per share. Abbott's cash dividend is payable Aug. 15, 2022 , to shareholders of record at the close of business on July 15, 2022 .
Abbott has increased its dividend payout for 50 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.
About Abbott: 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 113,000 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 .
Abbott will live-webcast its 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 in the 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" in our Annual Report on Form 10-K for the year ended Dec. 31, 2021 , 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.
1 All reported amounts relate to continuing operations only as there are no discontinued operations in the periods presented.
2 Data on file, Abbott Diabetes Care. Comparison based on publicly available information.
3 Among patient-applied sensors. Data on file, Abbott Diabetes Care.
4 In the second quarter of 2022, COVID-19 testing-related sales were $2.324 billion. In the second quarter of 2021, total worldwide sales were $10.223 billion, which included COVID-19 testing-related sales of $1.267 billion.
5 In the second quarter of 2022, U.S. sales of certain infant formula products were $116 million. In the second quarter of 2021, U.S. sales of certain infant formula products were $280 million.
6 In the second quarter of 2021, worldwide Nutrition sales were $2.108 billion, which included $280 million of U.S. sales of certain infant formula products.
7 In the second quarter of 2022, Core Laboratory and Molecular Diagnostics COVID-19 testing-related sales were $12 million and $75 million, respectively. In the second quarter of 2021, worldwide Core Laboratory and Molecular Diagnostics sales were $1.306 billion and $290 million, respectively. Core Laboratory and Molecular Diagnostics COVID-19 testing-related sales in the second quarter of 2021 were $58 million and $173 million, respectively.
Abbott Laboratories and Subsidiaries Condensed Consolidated Statement of Earnings Second Quarter Ended June 30, 2022 and 2021 (in millions, except per share data) (unaudited)
2Q22 2Q21 % Change
Net Sales $11,257 $10,223 10.1
Cost of products sold, excluding amortization expense 4,933 4,947 (0.3) 1)
Amortization of intangible assets 507 504 0.7
Research and development 684 654 4.8
Selling, general, and administrative 2,757 2,726 1.1
Total Operating Cost and Expenses 8,881 8,831 0.6
Operating Earnings 2,376 1,392 70.6
Interest expense, net 106 123 (14.1)
Other (income) expense, net (82) (79) 3.6
Earnings before taxes 2,352 1,348 74.4
Taxes on earnings 334 159 109.2
Net Earnings $2,018 $1,189 69.7
Net Earnings Excluding Specified Items, as described below $2,542 $2,115 20.2 2)
Diluted Earnings per Common Share $1.14 $0.66 72.7
Diluted Earnings per Common Share,
excluding Specified Items, as described below $1.43 $1.17 22.2 2)
Average Number of Common Shares Outstanding
Plus Dilutive Common Stock Options 1,765 1,793
NOTES:
See tables titled "Non-GAAP Reconciliation of Financial Information" for an explanation of certain non-GAAP financial information.
See footnotes on the following below.
1) 2021 Cost of products sold, excluding amortization expense includes approximately $500 million of charges associated with a restructuring plan to align Abbott's manufacturing network for COVID-19 diagnostic tests with changes during the second quarter in projected testing demand.
2) 2022 Net Earnings and Diluted Earnings per Common Share, excluding Specified Items, excludes net after-tax charges of $524 million, or $0.29 per share, for intangible amortization, charges related to a voluntary recall and other net expenses primarily associated with acquisitions.
2021 Net Earnings and Diluted Earnings per Common Share, excluding Specified Items, excludes net after-tax charges of $926 million, or $0.51 per share, for intangible amortization and other net expenses primarily associated with restructuring actions, certain litigation and acquisitions.
Abbott Laboratories and Subsidiaries Condensed Consolidated Statement of Earnings First Half Ended June 30, 2022 and 2021 (in millions, except per share data) (unaudited)
1H22 1H21 % Change
Net Sales $23,152 $20,679 12.0
Cost of products sold, excluding amortization expense 9,920 9,348 6.1 1)
Amortization of intangible assets 1,019 1,013 0.6
Research and development 1,381 1,308 5.6
Selling, general, and administrative 5,544 5,509 0.6
Total Operating Cost and Expenses 17,864 17,178 4.0
Operating Earnings 5,288 3,501 51.0
Interest expense, net 223 247 (9.9)
Net foreign exchange (gain) loss (3) 3 n/m
Other (income) expense, net (160) (140) 14.5
Earnings before taxes 5,228 3,391 54.2
Taxes on earnings 763 409 86.5 2)
Net Earnings $4,465 $2,982 49.7
Net Earnings Excluding Specified Items, as described below $5,619 $4,483 25.3 3)
Diluted Earnings per Common Share $2.51 $1.66 51.2
Diluted Earnings per Common Share,
excluding Specified Items, as described below $3.16 $2.49 26.9 3)
Average Number of Common Shares Outstanding
Plus Dilutive Common Stock Options 1,770 1,792
NOTES:
See tables titled "Non-GAAP Reconciliation of Financial Information" for an explanation of certain non-GAAP financial information.
n/m = Percent change is not meaningful.
See footnotes on the following below.
1) 2021 Cost of products sold, excluding amortization expense includes approximately $500 million of charges associated with a restructuring plan to align Abbott's manufacturing network for COVID-19 diagnostic tests with changes during the second quarter in projected testing demand.
2) 2022 Taxes on Earnings includes the recognition of approximately $27 million of net tax expense as a result of the resolution of various tax positions related to prior years and approximately $32 million in excess tax benefits associated with share-based compensation.
2021 Taxes on Earnings includes the recognition of approximately $90 million in excess tax benefits associated with share-based compensation.
3) 2022 Net Earnings and Diluted Earnings per Common Share, excluding Specified Items, excludes net after-tax charges of $1.154 billion, or $0.65 per share, for intangible amortization, charges related to a voluntary recall and other net expenses primarily associated with acquisitions.
2021 Net Earnings and Diluted Earnings per Common Share, excluding Specified Items, excludes net after-tax charges of $1.501 billion, or $0.83 per share, for intangible amortization and other net expenses primarily associated with restructuring actions, certain litigation and acquisitions.
Abbott Laboratories and Subsidiaries Non-GAAP Reconciliation of Financial Information Second Quarter Ended June 30, 2022 and 2021 (in millions, except per share data) (unaudited)
2Q22
As Reported (GAAP) Specified Items As Adjusted % to Sales
Intangible Amortization $ 507 $ (507) $ --
Gross Margin 5,817 563 6,380 56.7 %
R&D 684 (32) 652 5.8 %
SG&A 2,757 (14) 2,743 24.4 %
Other (income) expense, net (82) (12) (94)
Earnings before taxes 2,352 621 2,973
Taxes on Earnings 334 97 431
Net Earnings 2,018 524 2,542
Diluted Earnings per Share $1.14 $0.29 $1.43
2Q21
As Reported (GAAP) Specified Items As Adjusted % to Sales
Intangible Amortization $ 504 $ (504) $ --
Gross Margin 4,772 1,048 5,820 56.9 %
R&D 654 (18) 636 6.2 %
SG&A 2,726 (90) 2,636 25.8 %
Other (income) expense, net (79) 35 (44)
Earnings before taxes 1,348 1,121 2,469
Taxes on Earnings 159 195 354
Net Earnings 1,189 926 2,115
Diluted Earnings per Share $0.66 $0.51 $1.17
Abbott Laboratories and Subsidiaries Non-GAAP Reconciliation of Financial Information First Half Ended June 30, 2022 and 2021 (in millions, except per share data) (unaudited)
1H22
As Reported (GAAP) Specified Items As Adjusted % to Sales
Intangible Amortization $ 1,019 $ (1,019) $ --
Gross Margin 12,213 1,199 13,412 57.9 %
R&D 1,381 (65) 1,316 5.7 %
SG&A 5,544 (53) 5,491 23.7 %
Other (income) expense, net (160) (27) (187)
Earnings before taxes 5,228 1,344 6,572
Taxes on Earnings 763 190 953
Net Earnings 4,465 1,154 5,619
Diluted Earnings per Share $2.51 $0.65 $3.16
1H21
As Reported (GAAP) Specified Items As Adjusted % to Sales
Intangible Amortization $ 1,013 $ (1,013) $ --
Gross Margin 10,318 1,597 11,915 57.6 %
R&D 1,308 (46) 1,262 6.1 %
SG&A 5,509 (244) 5,265 25.5 %
Other (income) expense, net (140) 23 (117)
Earnings before taxes 3,391 1,864 5,255
Taxes on Earnings 409 363 772
Net Earnings 2,982 1,501 4,483
Diluted Earnings per Share $1.66 $0.83 $2.49
2Q22
($ in millions) Pre-Tax Income Taxes on Earnings Tax Rate
As reported (GAAP) $2,352 $ 334 14.2 %
Specified items 621 97
Excluding specified items $2,973 $431 14.5 %
2Q21
($ in millions) Pre-Tax Income Taxes on Earnings Tax Rate
As reported (GAAP) $1,348 $159 11.9 %
Specified items 1,121 195
Excluding specified items $2,469 $354 14.4 %
1H22
($ in millions) Pre-Tax Income Taxes on Earnings Tax Rate
As reported (GAAP) $5,228 $ 763 14.6 % 1)
Specified items 1,344 190
Excluding specified items $6,572 $953 14.5 %
1H21
($ in millions) Pre-Tax Income Taxes on Earnings Tax Rate
As reported (GAAP) $3,391 $409 12.1 % 2)
Specified items 1,864 363
Excluding specified items $5,255 $772 14.7 %
1) 2022 Taxes on Earnings includes the recognition of approximately $27 million of net tax expense as a result of the resolution of various tax positions related to prior years and approximately $32 million in excess tax benefits associated with share-based compensation.
2) 2021 Taxes on Earnings includes the recognition of approximately $90 million in excess tax benefits associated with share-based compensation.
Abbott Laboratories and Subsidiaries Details of Specified Items Second Quarter Ended June 30, 2022 (in millions, except per share data) (unaudited)
Acquisition or Divestiture- related (a) Restructuring and Cost Reduction Initiatives (b) Intangible Amortization Other (c) Total Specifieds
Gross Margin $ 20 $ (6) $ 507 $ 42 $ 563
R&D (5) -- -- (27) (32)
SG&A (7) -- -- (7) (14)
Other (income) expense, net (4) -- -- (8) (12)
Earnings before taxes $ 36 $ (6) $ 507 $ 84 621
Taxes on Earnings (d) 97
Net Earnings $ 524
Diluted Earnings per Share $ 0.29
The table above provides additional details regarding the specified items described on tables titled "Non-GAAP Reconciliation of Financial Information."
a) Acquisition-related expenses include integration costs, which represent incremental costs directly related to integrating the acquired businesses and include expenditures for the integration of systems, processes and business activities.
b) Restructuring and cost reduction initiative expenses include severance, outplacement, and other direct costs associated with specific restructuring plans and cost reduction initiatives. The Gross Margin amount includes a credit associated with the charges taken in the second quarter of 2021 for a restructuring plan related to Abbott's manufacturing network for COVID-19 diagnostic tests.
c) Other includes costs related to a voluntary recall within the Nutrition segment and incremental costs to comply with the European Union's Medical Device (MDR) and In Vitro Diagnostics Medical Device (IVDR) Regulations for previously approved products.
d) Reflects the net tax benefit associated with the specified items and excess tax benefits associated with share-based compensation.
Abbott Laboratories and Subsidiaries Details of Specified Items Second Quarter Ended June 30, 2021 (in millions, except per share data) (unaudited)
Acquisition or Divestiture- related (a) Restructuring and Cost Reduction Initiatives (b) Intangible Amortization Other (c) Total Specifieds
Gross Margin $ 21 $ 510 $ 504 $ 13 $ 1,048
R&D (3) 1 -- (16) (18)
SG&A (18) 2 -- (74) (90)
Other (income) expense, net (3) -- -- 38 35
Earnings before taxes $ 45 $ 507 $ 504 $ 65 1,121
Taxes on Earnings (d) 195
Net Earnings $ 926
Diluted Earnings per Share $ 0.51
The table above provides additional details regarding the specified items on tables titled "Non-GAAP Reconciliation of Financial Information."
a) Acquisition-related expenses include integration costs, which represent incremental costs directly related to integrating the acquired businesses and include expenditures for the integration of systems, processes and business activities.
b) Restructuring and cost reduction initiative expenses include severance, outplacement, and other direct costs associated with specific restructuring plans and cost reduction initiatives. Restructuring and cost reduction plans consist of distinct initiatives to streamline operations including the consolidation and rationalization of business activities and facilities, workforce reductions, the transfer of product lines between manufacturing facilities, and the transfer of other business activities between sites. The Gross Margin amount includes charges associated with a restructuring plan to align Abbott's manufacturing network for COVID-19 diagnostic tests with changes during the second quarter in projected testing demand.
c) Other includes costs related to certain litigation and the impairment of an intangible asset, as well as a gain on the disposition of an equity method investment.
d) Reflects the net tax benefit associated with the specified items and excess tax benefits associated with share-based compensation.
Abbott Laboratories and Subsidiaries Details of Specified Items First Half Ended June 30, 2022 (in millions, except per share data) (unaudited)
Acquisition or Divestiture- related (a) Restructuring and Cost Reduction Initiatives (b) Intangible Amortization Other (c) Total Specifieds
Gross Margin $ 41 $ (12) $ 1,019 $ 151 $ 1,199
R&D (7) (1) -- (57) (65)
SG&A (18) -- -- (35) (53)
Other (income) expense, net (11) -- -- (16) (27)
Earnings before taxes $ 77 $ (11) $ 1,019 $ 259 1,344
Taxes on Earnings (d) 190
Net Earnings $ 1,154
Diluted Earnings per Share $ 0.65
The table above provides additional details regarding the specified items on tables titled "Non-GAAP Reconciliation of Financial Information."
a) Acquisition-related expenses include integration costs, which represent incremental costs directly related to integrating the acquired businesses and include expenditures for the integration of systems, processes and business activities.
b) Restructuring and cost reduction initiative expenses include severance, outplacement, and other direct costs associated with specific restructuring plans and cost reduction initiatives. The Gross Margin amount includes a credit associated with the charges taken in the second quarter of 2021 for a restructuring plan related to Abbott's manufacturing network for COVID-19 diagnostic tests.
c) Other includes charges related to a voluntary recall within the Nutrition segment and incremental costs to comply with the European Union's Medical Device (MDR) and In Vitro Diagnostics Medical Device (IVDR) Regulations for previously approved products.
d) Reflects the net tax benefit associated with the specified items, excess tax benefits associated with share-based compensation and net tax expense as a result of the resolution of various tax positions related to prior years.
Abbott Laboratories and Subsidiaries Details of Specified Items First Half Ended June 30, 2021 (in millions, except per share data) (unaudited)
Acquisition or Divestiture- related (a) Restructuring and Cost Reduction Initiatives (b) Intangible Amortization Other (c) Total Specifieds
Gross Margin $ 40 $ 529 $ 1,013 $ 15 $ 1,597
R&D (5) 1 -- (42) (46)
SG&A (31) 1 -- (214) (244)
Other (income) expense, net (3) 1 -- 25 23
Earnings before taxes $ 79 $ 526 $ 1,013 $ 246 1,864
Taxes on Earnings (d) 363
Net Earnings $ 1,501
Diluted Earnings per Share $ 0.83
The table above provides additional details regarding the specified items on tables titled "Non-GAAP Reconciliation of Financial Information."
a) Acquisition-related expenses include integration costs, which represent incremental costs directly related to integrating the acquired businesses and include expenditures for the integration of systems, processes and business activities.
b) Restructuring and cost reduction initiative expenses include severance, outplacement, and other direct costs associated with specific restructuring plans and cost reduction initiatives. Restructuring and cost reduction plans consist of distinct initiatives to streamline operations including the consolidation and rationalization of business activities and facilities, workforce reductions, the transfer of product lines between manufacturing facilities, and the transfer of other business activities between sites. The Gross Margin amount includes charges associated with a restructuring plan to align Abbott's manufacturing network for COVID-19 diagnostic tests with changes during the second quarter in projected testing demand.
c) Other primarily relates to the costs related to certain litigation, the acquisition of a research and development asset, the impairments of an equity investment and an intangible asset, and the gain on the disposition of an equity method investment.
d) Reflects the net tax benefit associated with the specified items and excess tax benefits associated with share-based compensation.

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Last updated: Jul 20, 2022