Shares of Abbott Laboratories popped Wednesday after the company’s earnings and revenue topped Wall Street’s expectations, defying a dramatic slowdown in sales of its Covid-19 tests.
The medical products company posted adjusted earnings per share of $1.03. That’s above the average estimate of 99 cents per share, based on a survey of analysts by Refinitiv.
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Abbott reported revenue of $9.7 billion for the first quarter, slightly surpassing the Refinitiv estimate of $9.64 billion due to recovery in its medical devices business. But the Chicago-based company noted that revenue decreased by 18.1% from the same period last year, largely driven by a steep decline in global sales of its rapid Covid test.
The company posted Covid-testing sales of $730 million during the three-month period, compared to $3.3 billion during the first quarter of 2022.
Sales of Abbott’s 15-minute, $5 Covid test reached an all-time high during that period a year ago and have buoyed the company’s overall revenue since entering the U.S. market in 2020.
But Abbott and other drugmakers like Pfizer and Moderna have been bracing for a drop-off in Covid-related sales this year as the world emerges from the pandemic and demand for blockbuster vaccines and treatments slows.
Abbott Chairman and CEO Robert Ford said during an earnings call that those Covid-related headwinds may actually be easing.
“As we moved through the first part of the year, that’s exactly what we continued to see,” he said. “Most notably, the impact of Covid has rapidly and significantly lessened.”
Still, Abbott lowered its outlook for Covid-testing sales this year to $1.5 billion, down from the $2 billion it forecast in January.
Strong sales in Abbott’s medical devices business fueled the company’s first-quarter beats. The unit raked in $3.9 billion in sales during the quarter, up nearly 9% from the same period last year.
Abbott’s glucose monitoring device Freestyle Libre contributed $1.2 billion alone.
Ford said the rise signals a recovery in demand for surgical procedures, pointing to an improvement in staffing levels at hospitals across the U.S.
“I think the hospital systems have done a really good job right now at managing through the staffing shortages, and we’re starting to see the impact there,” Ford said during the call.
That comes after rival Johnson & Johnson reported strong growth in its own medical devices unit, noting that surgical procedures are “well in recovery.”