ABBOTT LABORATORIES Q3 FY2024 earnings call

Management Statement and Operational Highlights

• Delivered organic sales growth >8% and adjusted earnings per share of $1.21.
• Accomplished key objectives including entering strategic partnerships, launching new products, and R&D advancements.
• Nutrition saw growth led by U.S. segments, with double-digit growth in U.S. Pediatric and Adult Nutrition.
• Diagnostics Core Lab grew due to global demand for routine diagnostic testing.
• EPE had balanced growth across markets and therapeutic areas.
• Med Tech segments had strong performances with product launches, trial completions, and milestones in various divisions.

Segment Performance

• Nutrition: Sales increased 3.5% in the quarter. U.S. Pediatric Nutrition saw 12% growth due to market share gains in infant formula, and U.S. Adult Nutrition grew 11.5% led by Ensure and Glucerna brands.
• Diagnostics: Core Laboratory Diagnostics sales increased 4.5% excluding COVID testing sales, driven by global demand for routine diagnostic testing and adoption of market-leading systems.
• EPE: Sales increased 7% with well-balanced growth across markets and therapeutic areas.
• Med Tech: Sales grew >13%. Diabetes Care had continuous glucose monitors sales exceeding $1.6 billion (+21%) and launched Lingo. Electrophysiology grew 14% in U.S. and international markets. Structural Heart grew >16% with market-leading portfolio. Other segments like Ribbon Management, Heart Failure, Vascular, and Neuromodulation also had specific growth rates.

Guidance

• Forecasted adjusted earnings per share guidance for Q4 is $1.31 to $1.37.
• Exchange is expected to have an unfavorable impact of less than 1% on fourth quarter reported sales.

Risks

• Discussions on potential impact of lawsuits related to infant formula, with concerns about regulatory process and liability.
• Uncertainties related to market competition and regulatory approvals in various segments, such as potential challenges in structural heart market capacity and electrophysiology product adoption.

Question and Answer

Q: In Q3 devices were strong, but Nutrition and Diagnostics came in below expectations, but still maintained full year guidance. What happened in those divisions in Q3 and what's giving confidence to reiterate full year revenue guidance?

A: Robert Ford said some divisions fell short temporarily but other businesses overperformed. Issues in Nutrition were onetime related to international pediatric commercial execution, and in Diagnostics due to VBP implementation in China. Confidence comes from broad diversified portfolio and multiple business units overperforming.

Q: Larry Biegelsen asked about Libre and CGM market. Your view of the state of the CGM market, confidence in overall CGM market outlook and goal of $10 billion in sales by 2028, and color on Lingo?

A: Robert Ford was bullish on the CGM market, seeing mass market potential, Libre being a $6 billion-plus product growing 20% this year, and confident in achieving the $10 billion target with 15% compound annual growth rate. Lingo launched with good early interest and reorder rates.

Q: A: Q: A: Q: A: Q: A: Q: A: Q: A: Q: A: Q: A: Q: A: Q: A: