Abbott Laboratories reported strong earnings Wednesday, despite spending recent months responding to criticism over problems that led to the shutdown of one of its infant formula-producing plants.
It’s adjusted earnings per share grew by 22% to $1.43, beating estimates. Abbott’s sales were up 14% to $11.3 billion, led partly by the popularity of its BinaxNOW rapid, at-home COVID-19 tests. Abbott, which is based in the north suburbs, had $2.3 billion worth of COVID-19 testing related sales in the second quarter.
It’s nutrition sales, however, dropped by 4.5% because of the temporary closure of its plant in Sturgis, Mich., which produces infant formula.
That facility closure is widely blamed for exacerbating a nationwide shortage of infant formulas that left many store shelves bare and sent parents scrambling.
Abbott closed the facility earlier this year and recalled formulas produced there, as the U.S. Food and Drug Administration announced that it was investigating complaints of Cronobacter sakazakii infections among babies who reportedly consumed formula from the plant. The babies were hospitalized, and Cronobacter may have contributed to two babies’ deaths, according to the FDA.
The FDA inspected the facility from Jan. 31 through March 18 and found five environmental subsamples collected from the Sturgis facility to be positive for Cronobacter sakazakii, though product samples collected by the FDA at the facility were negative for Cronobacter. The FDA also found standing water, cracks in key equipment and leaks in the roof, among other issues.
Abbott leaders have apologized for the company’s role in the national shortage. Abbott, however, has said that the Cronobacter that was found in environmental testing during the investigation was in “non-product contact areas of the facility and has not been linked to any known infant illness.”
The FDA has said that, “despite extensive investigation the evidence does not rule in or rule out a definitive link between these infant deaths and the product produced at Abbott Nutrition’s Sturgis plant.”
After making improvements to the facility, Abbott resumed production at the plant in June, and then had to again suspend it because of storms and flooding.
It again restarted production of its EleCare formula at that plant July 1 and is working to restart the production of its popular Similac formula, said Abbott CEO and Chairman Robert Ford on Wednesday, during an earnings call. EleCare is a formula for babies and children with allergies and certain gastrointestinal disorders. The company and the federal government also shipped formulas from overseas to the U.S. to help with the shortage.
“We will do everything possible to accelerate delivery of product to retailers so families can have access to the product they need as soon as possible,” Ford said.
In recent months, Abbott has faced scathing criticism over its handling of issues at the plant, from FDA officials as well as members of Congress who accused the company of negligence and questioned how the shutdown of one plant could lead to such dire shortages.
Ford said Wednesday Abbott is working to expand its formula manufacturing capacity and make sure there are redundancies within its system.
