Abbott Laboratories came in Wednesday with a "solid" first-quarter report, but Abbott stock slipped on its light second-quarter outlook.
The medical devices segment was the standout, Evercore ISI analyst Vijay Kumar said in a report to clients. Every business within it topped Street expectations. Notably, electrophysiology sales ramped almost 19% organically, "which should allay share loss fear," he said. Electrophysiology is a means of measuring heart rhythm to detect abnormalities.
Meanwhile, sales of Abbott's wearable glucose monitor, Libre, soared 22% to $1.5 billion. Revenue from the structural heart business accelerated about 13%.
"All in, these were solid results," Kumar said.
But Abbott stock toppled 3%, closing at 105.90 on today's stock market after the company issued below-expectations guidance for second-quarter profit. Shares dropped below the lower bounds of a flat base with a buy point at 121.64 , MarketSurge.com shows.
Abbott Stock: Sales, Earnings Beat
Overall, Abbott's first-quarter sales inched 2.2% higher on a strict, as-reported basis to $9.96 billion. That beat expectations for $9.88 billion, according to FactSet.
Organically and excluding sales of Covid tests, Abbott's total revenue climbed 10.8%. This is the fifth straight quarter of double-digit organic growth, the company said in a news release.
Adjusted earnings fell almost 5% to 98 cents a share, but topped Abbott stock analysts' forecast by three pennies.
The strongest growth came from the medical devices business. Sales increased 14.3% organically to $4.45 billion, easily beating expectations for nearly $4.3 billion. Behind that, sales of established pharmaceuticals — which sell abroad — and nutrition rose a respective 13.7% and 7.7%. Nutrition includes Abbott's lineup of infant formula.
Diagnostics Unit Still Struggling
Abbott's diagnostics business, on the other hand, is still struggling with its success during the Covid pandemic. Organically, sales tumbled 15.5% to $2.21 billion. Excluding the impact of its Covid tests, sales rose a stronger 5.4%. But that still trailed Abbott's other segments and missed projections for $2.23 billion.
But Evercore's Kumar kept his outperform rating and 125 price target on Abbott stock.
For the year, Abbott narrowed its earnings guidance range to between $4.55 to $4.70 per share. The midpoint is higher than the previous guidance. Analysts project earnings of $4.62 a share. The company also expects full-year sales to grow 8.5% to 10% organically and excluding Covid tests. That's also a narrower range, but includes a higher midpoint than Abbott's previous forecast.
Second-quarter guidance came in light, with Abbott projecting earnings of $1.08 to $1.12 a share. At the midpoint, that's lower than the Street's estimate for $1.12.
Abbott stock undercut its 200-day line on the first-quarter report.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
