Mother and son jogging Mother and son jogging Mother and son jogging Mother and son jogging
Abbott Reports Fourth-Quarter 2019 Results; Announces Strong Forecast for 2020
- Fourth-quarter sales growth of 7.1 percent; organic sales growth of 8.5 percent
- Fourth-quarter GAAP EPS growth from continuing operations of 59.5 percent and adjusted EPS growth from continuing operations of 17.3 percent
- Several businesses achieved double-digit sales growth
- Forecast reflects continued top-tier sales and earnings growth for 2020

ABBOTT PARK, Ill., Jan. 22, 2020 /PRNewswire/ -- Abbott (NYSE: ABT) today announced financial results for the fourth quarter and full year ended Dec. 31, 2019.

  • Fourth-quarter worldwide sales of $8.3 billion increased 7.1 percent on a reported basis and 8.5 percent on an organic* basis.
  • Reported diluted EPS from continuing operations under GAAP was $0.59 in the fourth quarter. Adjusted diluted EPS from continuing operations, which excludes specified items, was $0.95, an increase of 17.3 percent versus prior year1.
  • Abbott issues full-year 2020 guidance for organic sales growth of 7.0 to 8.0 percent2, which excludes the impact of foreign exchange, and diluted EPS from continuing operations on a GAAP basis of $2.35 to $2.45. Projected full-year adjusted diluted EPS from continuing operations is $3.55 to $3.65, reflecting double-digit growth at the mid-point.
  • Medical Devices sales increased 9.7 percent on a reported basis and 11.3 percent on an organic basis in the fourth quarter. Sales performance was led by double-digit organic sales growth in Heart Failure, Electrophysiology, Structural Heart and Diabetes Care.
  • Established Pharmaceuticals sales increased 7.8 percent on a reported basis and 10.0 percent on an organic basis in the fourth quarter. Sales performance was led by growth across several countries in Latin America and Asia.
  • Core Laboratory Diagnostics sales increased 8.4 percent on a reported basis and 10.0 percent on an organic basis in the fourth quarter. Sales performance was led by above-market growth in the U.S. and internationally, where Abbott is achieving continued strong adoption of its Alinity® family of innovative and highly differentiated diagnostic instruments.

"Our focus on organic growth is driving top-tier performance," said Miles D. White, chairman and chief executive officer, Abbott. "We're entering 2020 with very good momentum and targeting continued strong growth."

* See note on organic growth below.

FOURTH-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 results for a non-core business within U.S. Adult Nutrition during the first nine months of 2018 as this business was discontinued during the third quarter 2018; and
  • Excludes the impact of foreign exchange.

Following are sales by business segment and commentary for the fourth quarter and full year 2019:

Total Company

($ in millions)

 
               

% Change vs. 4Q18

   

Sales 4Q19

 

Reported

 

Organic

   

 U.S. 

 

 Int'l 

 

 Total 

 

U.S.

 

Int'l

 

Total

 

U.S.

 

Int'l

 

Total

Total *

 

2,960

 

5,354

 

8,314

 

7.5

 

6.9

 

7.1

 

7.5

 

9.1

 

8.5

Nutrition

 

789

 

1,079

 

1,868

 

3.6

 

6.4

 

5.2

 

3.6

 

7.5

 

5.8

Diagnostics

 

766

 

1,292

 

2,058

 

9.6

 

2.4

 

5.0

 

9.6

 

4.6

 

6.4

Established Pharmaceuticals

 

--

 

1,174

 

1,174

 

 n/a

 

7.8

 

7.8

 

 n/a

 

10.0

 

10.0

Medical Devices

 

1,404

 

1,800

 

3,204

 

9.2

 

10.1

 

9.7

 

9.2

 

12.9

 

11.3

     

* Total Q4 2019 Abbott sales from continuing operations include Other Sales of $10 million.

   
     
               

% Change vs. 12M18

   

Sales 12M19

 

Reported

 

Organic

   

U.S.

 

Int'l

 

Total

 

U.S.

 

Int'l

 

Total

 

U.S.

 

Int'l

 

Total

Total *

 

11,398

 

20,506

 

31,904

 

5.2

 

3.9

 

4.3

 

5.5

 

8.8

 

7.7

Nutrition

 

3,110

 

4,299

 

7,409

 

1.1

 

3.5

 

2.5

 

2.4

 

7.5

 

5.3

Diagnostics

 

2,887

 

4,826

 

7,713

 

6.3

 

1.0

 

2.9

 

6.3

 

5.7

 

5.9

Established Pharmaceuticals

 

--

 

4,486

 

4,486

 

 n/a

 

1.4

 

1.4

 

 n/a

 

7.3

 

7.3

Medical Devices

 

5,374

 

6,865

 

12,239

 

7.2

 

8.0

 

7.6

 

7.2

 

13.0

 

10.5

 

* Total 12M 2019 Abbott sales from continuing operations include Other Sales of $57 million.

 

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.

Fourth-quarter 2019 worldwide sales of $8.3 billion increased 7.1 percent on a reported basis. On an organic basis, worldwide sales increased 8.5 percent. Refer to table titled "Non-GAAP Reconciliation of Adjusted Historical Revenue" for a reconciliation of adjusted historical revenue.

Nutrition

($ in millions)         

 
               

% Change vs. 4Q18

   

Sales 4Q19

 

Reported

 

Organic

   

U.S.

 

Int'l

 

Total

 

U.S.

 

Int'l

 

Total

 

U.S.

 

Int'l

 

Total

Total

 

789

 

1,079

 

1,868

 

3.6

 

6.4

 

5.2

 

3.6

 

7.5

 

5.8

Pediatric

 

473

 

564

 

1,037

 

1.2

 

3.4

 

2.4

 

1.2

 

4.1

 

2.8

Adult

 

316

 

515

 

831

 

7.3

 

9.9

 

8.9

 

7.3

 

11.5

 

9.9

 
               

% Change vs. 12M18

   

Sales 12M19

 

Reported

 

Organic

   

U.S.

 

Int'l

 

Total

 

U.S.

 

Int'l

 

Total

 

U.S.

 

Int'l

 

Total

Total

 

3,110

 

4,299

 

7,409

 

1.1

 

3.5

 

2.5

 

2.4

 

7.5

 

5.3

Pediatric

 

1,879

 

2,282

 

4,161

 

1.9

 

1.3

 

1.6

 

1.9

 

4.6

 

3.4

Adult

 

1,231

 

2,017

 

3,248

 

(0.1)

 

6.2

 

3.7

 

3.2

 

10.9

 

7.9

Worldwide Nutrition sales increased 5.2 percent on a reported basis in the fourth quarter. On an organic basis, sales increased 5.8 percent. Refer to table titled "Non-GAAP Reconciliation of Adjusted Historical Revenue" for a reconciliation of adjusted historical revenue.

Worldwide Pediatric Nutrition sales increased 2.4 percent on a reported basis in the fourth quarter, including an unfavorable 0.4 percent effect of foreign exchange, and increased 2.8 percent on an organic basis. International sales increased 3.4 percent on a reported basis and 4.1 percent on an organic basis. Sales growth was led by Abbott's market-leading toddler brands, PediaSure® and Pedialyte®.

Worldwide Adult Nutrition sales increased 8.9 percent on a reported basis in the fourth quarter and increased 9.9 percent on an organic basis. International Adult Nutrition sales increased 9.9 percent on a reported basis and 11.5 percent on an organic basis in the fourth quarter. Sales performance in the quarter was led by strong growth of Ensure®, Abbott's market-leading complete and balanced nutrition brand, and Glucerna®, Abbott's market-leading diabetes-specific nutrition brand.

Diagnostics

($ in millions)

 
               

% Change vs. 4Q18

   

Sales 4Q19

 

Reported

 

Organic

   

U.S.

 

Int'l

 

Total

 

U.S.

 

Int'l

 

Total

 

U.S.

 

Int'l

 

Total

Total

 

766

 

1,292

 

2,058

 

9.6

 

2.4

 

5.0

 

9.6

 

4.6

 

6.4

Core Laboratory

 

293

 

956

 

1,249

 

13.2

 

7.0

 

8.4

 

13.2

 

9.1

 

10.0

Molecular

 

36

 

80

 

116

 

(4.1)

 

(6.5)

 

(5.7)

 

(4.1)

 

(4.5)

 

(4.4)

Point of Care

 

104

 

33

 

137

 

(4.9)

 

16.0

 

(0.5)

 

(4.9)

 

17.4

 

(0.2)

Rapid Diagnostics

 

333

 

223

 

556

 

13.6

 

(12.3)

 

1.5

 

13.6

 

(9.8)

 

2.7

 
               

% Change vs. 12M18

   

Sales 12M19

 

Reported

 

Organic

   

U.S.

 

Int'l

 

Total

 

U.S.

 

Int'l

 

Total

 

U.S.

 

Int'l

 

Total

Total

 

2,887

 

4,826

 

7,713

 

6.3

 

1.0

 

2.9

 

6.3

 

5.7

 

5.9

Core Laboratory

 

1,086

 

3,570

 

4,656

 

10.3

 

4.9

 

6.2

 

10.3

 

9.9

 

10.0

Molecular

 

149

 

293

 

442

 

(1.8)

 

(11.7)

 

(8.6)

 

(1.8)

 

(8.4)

 

(6.3)

Point of Care

 

438

 

123

 

561

 

1.4

 

1.7

 

1.5

 

1.4

 

3.9

 

1.9

Rapid Diagnostics

 

1,214

 

840

 

2,054

 

5.7

 

(9.0)

 

(0.8)

 

5.7

 

(4.4)

 

1.2

Worldwide Diagnostics sales increased 5.0 percent on a reported basis in the fourth quarter, including an unfavorable 1.4 percent effect of foreign exchange, and increased 6.4 percent on an organic basis.

Core Laboratory Diagnostics sales increased 8.4 percent on a reported basis and 10.0 percent on an organic basis in the fourth quarter. Sales performance was led by above-market growth in the U.S. and internationally, where Abbott is achieving continued strong adoption of its Alinity family of innovative and highly differentiated diagnostic instruments. During the quarter, Abbott announced the Australian Red Cross Blood Services selected its Alinity-S system for the country's blood and plasma screening.

Molecular Diagnostics sales decreased 5.7 percent on a reported basis in the fourth quarter, including an unfavorable 1.3 percent effect of foreign exchange, and decreased 4.4 percent on an organic basis.

Point of Care Diagnostics sales decreased 0.5 percent on a reported basis in the fourth quarter, including an unfavorable 0.3 percent effect of foreign exchange, and decreased 0.2 percent on an organic basis.

Rapid Diagnostics sales increased 1.5 percent on a reported basis in the fourth quarter, including an unfavorable 1.2 percent effect of foreign exchange, and increased 2.7 percent on an organic basis. Organic sales growth was led by infectious disease testing in developed markets and cardio-metabolic testing globally, partially offset by lower infectious disease testing sales in Africa.

Established Pharmaceuticals

($ in millions)

 
               

% Change vs. 4Q18

   

Sales 4Q19

 

Reported

 

Organic

   

U.S.

 

Int'l

 

Total

 

U.S.

 

Int'l

 

Total

 

U.S.

 

Int'l

 

Total

Total

 

--

 

1,174

 

1,174

 

 n/a 

 

7.8

 

7.8

 

 n/a 

 

10.0

 

10.0

Key Emerging Markets

 

--

 

896

 

896

 

 n/a 

 

7.0

 

7.0

 

 n/a 

 

9.5

 

9.5

Other

 

--

 

278

 

278

 

 n/a 

 

10.4

 

10.4

 

 n/a 

 

11.6

 

11.6

 
               

% Change vs. 12M18

   

Sales 12M19

 

Reported

 

Organic

   

U.S.

 

Int'l

 

Total

 

U.S.

 

Int'l

 

Total

 

U.S.

 

Int'l

 

Total

Total

 

--

 

4,486

 

4,486

 

 n/a 

 

1.4

 

1.4

 

 n/a 

 

7.3

 

7.3

Key Emerging Markets

 

--

 

3,392

 

3,392

 

 n/a 

 

0.9

 

0.9

 

 n/a 

 

7.9

 

7.9

Other

 

--

 

1,094

 

1,094

 

 n/a 

 

3.3

 

3.3

 

 n/a 

 

5.6

 

5.6

Established Pharmaceuticals sales increased 7.8 percent on a reported basis in the fourth quarter, including an unfavorable 2.2 percent effect of foreign exchange, and increased 10.0 percent on an organic basis.

Key Emerging Markets include India, Brazil, Russia and China along with several additional emerging countries that represent the most attractive long-term growth opportunities for Abbott's branded generics product portfolio. Sales in these geographies increased 7.0 percent on a reported basis in the fourth quarter and increased 9.5 percent on an organic basis, which excludes an unfavorable 2.5 percent effect of foreign exchange. Organic sales growth was led by performance across several geographies in Latin America and Asia.

Other sales increased 10.4 percent on a reported basis in the fourth quarter, including an unfavorable 1.2 percent effect of foreign exchange, and increased 11.6 percent on an organic basis.

Medical Devices

($ in millions)

 
               

% Change vs. 4Q18

   

Sales 4Q19

 

Reported

 

Organic

   

U.S.

 

Int'l

 

Total

 

U.S.

 

Int'l

 

Total

 

U.S.

 

Int'l

 

Total

Total

 

1,404

 

1,800

 

3,204

 

9.2

 

10.1

 

9.7

 

9.2

 

12.9

 

11.3

Rhythm Management

 

267

 

277

 

544

 

1.8

 

2.8

 

2.3

 

1.8

 

5.5

 

3.7

Electrophysiology

 

193

 

266

 

459

 

7.7

 

11.8

 

10.0

 

7.7

 

13.1

 

10.8

Heart Failure

 

146

 

52

 

198

 

16.8

 

(0.8)

 

11.6

 

16.8

 

2.1

 

12.5

Vascular

 

260

 

454

 

714

 

(4.6)

 

1.5

 

(0.8)

 

(4.6)

 

3.2

 

0.3

Structural Heart

 

170

 

206

 

376

 

25.7

 

7.7

 

15.1

 

25.7

 

10.8

 

17.0

Neuromodulation

 

175

 

47

 

222

 

(0.9)

 

14.6

 

2.0

 

(0.9)

 

20.0

 

3.0

Diabetes Care

 

193

 

498

 

691

 

43.5

 

26.0

 

30.5

 

43.5

 

30.3

 

33.7

                                     

Vascular Product Lines:

                                   

   Coronary and Endovasculara)

 

239

 

452

 

691

 

(2.9)

 

1.2

 

(0.3)

 

(2.9)

 

2.9

 

0.8

                                     

a)

Includes drug-eluting stents, balloon catheters, guidewires, vascular imaging/diagnostics products, vessel closure, carotid and other coronary and peripheral products.

   
               

% Change vs. 12M18

   

Sales 12M19

 

Reported

 

Organic

   

U.S.

 

Int'l

 

Total

 

U.S.

 

Int'l

 

Total

 

U.S.

 

Int'l

 

Total

Total

 

5,374

 

6,865

 

12,239

 

7.2

 

8.0

 

7.6

 

7.2

 

13.0

 

10.5

Rhythm Management

 

1,057

 

1,087

 

2,144

 

(4.4)

 

(0.6)

 

(2.5)

 

(4.4)

 

4.4

 

0.0

Electrophysiology

 

742

 

979

 

1,721

 

9.5

 

10.8

 

10.2

 

9.5

 

14.8

 

12.5

Heart Failure

 

574

 

195

 

769

 

22.9

 

9.4

 

19.1

 

22.9

 

14.1

 

20.5

Vascular

 

1,047

 

1,803

 

2,850

 

(7.0)

 

0.0

 

(2.7)

 

(7.0)

 

4.1

 

(0.2)

Structural Heart

 

616

 

784

 

1,400

 

26.1

 

4.3

 

12.9

 

26.1

 

9.7

 

16.2

Neuromodulation

 

660

 

171

 

831

 

(4.2)

 

(1.8)

 

(3.8)

 

(4.2)

 

4.7

 

(2.4)

Diabetes Care

 

678

 

1,846

 

2,524

 

48.3

 

25.1

 

30.6

 

48.3

 

31.8

 

35.7

                                     

Vascular Product Lines:

                                   

   Coronary and Endovasculara)

 

947

 

1,793

 

2,740

 

(3.9)

 

0.0

 

(1.4)

 

(3.9)

 

4.1

 

1.3

                                     

 a)

Includes drug-eluting stents, balloon catheters, guidewires, vascular imaging/diagnostics products, vessel closure, carotid and other coronary and peripheral products.

 

Note: Insertable Cardiac Monitor (ICM) sales, which had previously been reported in Electrophysiology, are now included in Rhythm Management. Historical periods have been adjusted to reflect this change.

Worldwide Medical Devices sales increased 9.7 percent on a reported basis in the fourth quarter and increased 11.3 percent on an organic basis, led by double-digit growth in Electrophysiology, Heart Failure, Structural Heart and Diabetes Care.

In Electrophysiology, growth was led by strong performance in cardiac diagnostic and ablation catheters, which are used to help physicians accurately and effectively treat atrial fibrillation, a form of irregular heartbeat.

In Heart Failure, double-digit growth was driven by market adoption of Abbott's HeartMate 3® left ventricular assist device, which has been shown to improve survival and clinical outcomes in patients with advanced heart failure.

Growth in Structural Heart was led by MitraClip®, Abbott's market-leading device for the minimally invasive treatment of mitral regurgitation, or a leaky mitral heart valve. Worldwide sales of MitraClip were $191 million in the fourth quarter, an increase of 27.1 percent on a reported basis and 28.8 percent on an organic basis versus the prior year.

In Diabetes Care, sales increased 30.5 percent on a reported basis and 33.7 percent on an organic basis in the fourth quarter. Sales growth in the quarter was led by FreeStyle Libre®, Abbott's revolutionary continuous glucose monitoring system, with worldwide sales of $534 million, an increase of 58.5 percent on a reported basis and 62.4 percent on an organic basis versus the prior year.  

ABBOTT ISSUES GUIDANCE FOR 2020
Abbott is issuing full-year 2020 guidance for organic sales growth of 7.0 to 8.0 percent2, which excludes the impact of foreign exchange, and diluted earnings per share from continuing operations under Generally Accepted Accounting Principles (GAAP) of $2.35 to $2.45. Abbott forecasts net specified items for the full year 2020 of $1.20 per share. Specified items include intangible amortization expense, acquisition-related expenses, charges associated with cost reduction initiatives and other expenses. Excluding specified items, projected adjusted diluted earnings per share from continuing operations would be $3.55 to $3.65 for the full year 2020.

Abbott is issuing first-quarter 2020 guidance for diluted earnings per share from continuing operations under GAAP of $0.40 to $0.42. Abbott forecasts specified items for the first quarter 2020 of $0.29 per share primarily related to intangible amortization, acquisition-related expenses, cost reduction initiatives and other expenses. Excluding specified items, projected adjusted diluted earnings per share from continuing operations would be $0.69 to $0.71 for the first quarter.

ABBOTT ANNOUNCES INCREASE IN QUARTERLY DIVIDEND
On Dec. 13, 2019, the board of directors of Abbott increased the company's quarterly dividend to $0.36 per share from $0.32 per share, an increase of 12.5 percent. Abbott's cash dividend is payable Feb. 14, 2020, to shareholders of record at the close of business on Jan. 15, 2020.

Abbott has increased its dividend payout for 48 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 107,000 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 and @AbbottGlobal.

Abbott will webcast its live fourth-quarter earnings conference call through its Investor Relations website at www.abbottinvestor.com at 8:30 a.m. Central time today. An archived edition of the webcast will be available later that 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'' to our Annual Report on Securities and Exchange Commission Form 10-K for the year ended Dec. 31, 2018, and are incorporated 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 Fourth-quarter 2019 diluted EPS from continuing operations on a GAAP basis reflects 59.5 percent growth.

 

2 Abbott has not provided the GAAP financial measure for organic sales growth on a forward-looking basis because the company is unable to predict the impact of foreign exchange due to the unpredictability of future changes in foreign exchange rates, which could significantly impact reported sales growth.

 

Abbott Laboratories and Subsidiaries

Condensed Consolidated Statement of Earnings

Fourth Quarter Ended December 31, 2019 and 2018

(in millions, except per share data)

(unaudited)

 
   

4Q19

 

4Q18

 

% Change

 

Net Sales

 

$8,314

 

$7,765

 

7.1

 
               

Cost of products sold, excluding amortization expense

 

3,434

 

3,191

 

7.7

 

Amortization of intangible assets

 

483

 

488

 

(1.1)

 

Research and development

 

595

 

562

 

6.0

 

Selling, general, and administrative

 

2,413

 

2,359

 

2.3

 

Total Operating Cost and Expenses

 

6,925

 

6,600

 

4.9

 
               

Operating Earnings

 

1,389

 

1,165

 

19.2

 
               

Interest expense, net

 

139

 

152

 

(8.5)

 

Net foreign exchange (gain) loss

 

(2)

 

26

 

n/m

 

Debt extinguishment costs

 

63

 

86

 

(27.1)

 

Other (income) expense, net

 

(51)

 

(46)

 

13.5

 

Earnings from Continuing Operations before taxes

 

1,240

 

947

 

31.1

 
               

Tax expense on Earnings from Continuing Operations

 

191

 

292

 

(34.5)

1)

Earnings from Continuing Operations

 

1,049

 

655

 

60.3

 
               

Earnings from Discontinued Operations, net of taxes

 

--

 

(1)

 

n/m

 
               

Net Earnings

 

$1,049

 

$654

 

60.6

 
               

Earnings from Continuing Operations, excluding 

             

Specified Items, as described below

 

$1,705

 

$1,444

 

18.1

2)

               

Diluted Earnings per Common Share from:

             

Continuing Operations

 

$0.59

 

$0.37

 

59.5

 

Discontinued Operations

 

--

 

--

 

n/m

 

Total

 

$0.59

 

$0.37

 

59.5

 
               

Diluted Earnings per Common Share from Continuing 

             

Operations, excluding Specified Items, as described below

 

$0.95

 

$0.81

 

17.3

2)

               

Average Number of Common Shares Outstanding

             

Plus Dilutive Common Stock Options 

 

1,781

 

1,774

     
               

NOTES:

 

See tables titled "Non-GAAP Reconciliation of Financial Information From Continuing Operations" for an explanation of certain non-GAAP financial information.

n/m = Percent change is not meaningful.

See footnotes below.

   

1)

2018 Tax expense on Earnings from Continuing Operations includes an additional $85 million of tax expense for the transition tax associated with the Tax Cuts and Jobs Act (TCJA).

   

2)

2019 Net Earnings and Diluted Earnings per Common Share from Continuing Operations, excluding Specified Items, excludes net after-tax charges of $656 million, or $0.36 per share, for intangible amortization expense and other expenses primarily associated with acquisitions and restructuring actions.

   
 

2018 Net Earnings and Diluted Earnings per Common Share from Continuing Operations, excluding Specified Items, excludes net after-tax charges of $789 million, or $0.44 per share, for intangible amortization expense and other expenses primarily associated with acquisitions and restructuring actions, as well as additional transition tax related to the TCJA.

 

Abbott Laboratories and Subsidiaries

Condensed Consolidated Statement of Earnings

Year Ended December 31, 2019 and 2018

(in millions, except per share data)

(unaudited)

 
   

12M19

 

12M18

 

% Change

 

Net Sales

 

$31,904

 

$30,578

 

4.3

 
               

Cost of products sold, excluding amortization expense

 

13,231

 

12,706

 

4.1

 

Amortization of intangible assets

 

1,936

 

2,178

 

(11.1)

 

Research and development

 

2,440

 

2,300

 

6.1

1)

Selling, general, and administrative

 

9,765

 

9,744

 

0.2

 

Total Operating Cost and Expenses

 

27,372

 

26,928

 

1.7

 
               

Operating Earnings

 

4,532

 

3,650

 

24.2

 
               

Interest expense, net

 

576

 

721

 

(20.1)

 

Net foreign exchange (gain) loss

 

7

 

28

 

(74.1)

 

Debt extinguishment costs

 

63

 

167

 

(62.6)

 

Other (income) expense, net

 

(191)

 

(139)

 

38.2

 

Earnings from Continuing Operations before taxes

 

4,077

 

2,873

 

42.0

 
               

Tax expense on Earnings from Continuing Operations

 

390

 

539

 

(27.6)

2)

Earnings from Continuing Operations

 

3,687

 

2,334

 

58.0

 
               

Earnings from Discontinued Operations, net of taxes

 

--

 

34

 

n/m

 
               

Net Earnings

 

$3,687

 

$2,368

 

55.7

 
               

Earnings from Continuing Operations, excluding 

             

Specified Items, as described below

 

$5,810

 

$5,131

 

13.2

3)

               

Diluted Earnings per Common Share from:

             

Continuing Operations

 

$2.06

 

$1.31

 

57.3

 

Discontinued Operations

 

--

 

0.02

 

n/m

 

Total

 

$2.06

 

$1.33

 

54.9

 
               

Diluted Earnings per Common Share from Continuing 

             

Operations, excluding Specified Items, as described below

 

$3.24

 

$2.88

 

12.5

3)

               

Average Number of Common Shares Outstanding

             

Plus Dilutive Common Stock Options 

 

1,781

 

1,770

     
 

NOTES:

 

See tables titled "Non-GAAP Reconciliation of Financial Information From Continuing Operations" for an explanation of certain non-GAAP financial information.

n/m = Percent change is not meaningful.

See footnotes below.

   

1)

In 2019, in conjunction with the acquisition of Cephea Valve Technologies, Inc., Abbott acquired an R&D asset valued at $102 million, which was immediately expensed.

   

2)

2019 Tax expense on Earnings from Continuing Operations includes the impact of a $86 million reduction of the transition tax associated with the Tax Cuts and Jobs Act (TCJA) and approximately $100 million in excess tax benefits associated with share-based compensation.

   
 

2018 Tax expense on Earnings from Continuing Operations includes an additional $120 million of tax expense for the transition tax associated with the TCJA, as well as the impact of approximately $90 million in excess tax benefits associated with share-based compensation.

   

3)

2019 Net Earnings and Diluted Earnings per Common Share from Continuing Operations, excluding Specified Items, excludes net after-tax charges of $2.123 billion, or $1.18 per share, for intangible amortization expense and other expenses primarily associated with acquisitions and restructuring actions.

   
 

2018 Net Earnings and Diluted Earnings per Common Share from Continuing Operations, excluding Specified Items, excludes net after-tax charges of $2.797 billion, or $1.57 per share, for intangible amortization expense and other expenses primarily associated with acquisitions and restructuring actions.

 

Abbott Laboratories and Subsidiaries

Non-GAAP Reconciliation of Financial Information From Continuing Operations

Fourth Quarter Ended December 31, 2019 and 2018

(in millions, except per share data) 

(unaudited)

 
   

4Q19

   

As
Reported
(GAAP) 

 

Specified
Items

 

As
Adjusted

 

% to

Sales

                 

Intangible Amortization

 

 

$483

 

 

$(483)

 

--

   

Gross Margin

 

4,397

 

545

 

4,942

 

59.4%

R&D

 

595

 

(39)

 

556

 

6.7%

SG&A

 

2,413

 

(62)

 

2,351

 

28.3%

Debt extinguishment costs

 

63

 

(63)

 

--

   

Other (income) expense, net

 

(51)

 

(5)

 

(56)

   

Earnings from Continuing Operations before taxes 

 

1,240

 

714

 

1,954

   

Tax expense on Earnings from Continuing Operations

 

191

 

58

 

249

   

Earnings from Continuing Operations

 

1,049

 

656

 

1,705

   

Diluted Earnings per Share from Continuing Operations

 

$0.59

 

$0.36

 

$0.95

   
 

Specified items reflect intangible amortization expense of $483 million and other expenses of $231 million, primarily associated with acquisitions, restructuring actions and other expenses. See tables titled "Details of Specified Items" for additional details regarding specified items.

 
   

4Q18

   

As
Reported
(GAAP)

 

Specified
Items

 

As
Adjusted 

 

% to
Sales

                 

Intangible Amortization

 

 

$488

 

 

$(488)

 

--

   

Gross Margin

 

4,086

 

520

 

4,606

 

59.3%

R&D

 

562

 

(2)

 

560

 

7.2%

SG&A

 

2,359

 

(91)

 

2,268

 

29.2%

Net foreign exchange (gain) loss

 

26

 

(28)

 

(2)

   

Debt extinguishment costs

 

86

 

(86)

 

--

   

Other (income) expense, net

 

(46)

 

13

 

(33)

   

Earnings from Continuing Operations before taxes 

 

947

 

714

 

1,661

   

Tax expense on Earnings from Continuing Operations

 

292

 

(75)

 

217

   

Earnings from Continuing Operations

 

655

 

789

 

1,444

   

Diluted Earnings per Share from Continuing Operations

 

$0.37

 

$0.44

 

$0.81

   
 

Specified items reflect intangible amortization expense of $488 million and other expenses of $226 million, primarily associated with acquisitions, restructuring actions and other expenses, as well as $85 million of additional transition tax related to the TCJA. See tables titled "Details of Specified Items" for additional details regarding specified items.

 

Abbott Laboratories and Subsidiaries

Non-GAAP Reconciliation of Financial Information From Continuing Operations

Year Ended December 31, 2019 and 2018

(in millions, except per share data) 

(unaudited)

 
   

12M19

   

As
Reported
(GAAP) 

 

Specified
Items

 

As
Adjusted

 

% to
Sales

                 

Intangible Amortization

 

 

 

$1,936

 

 

$(1,936)

 

--

   

Gross Margin

 

16,737

 

2,140

 

18,877

 

59.2%

R&D

 

2,440

 

(198)

 

2,242

 

7.0%

SG&A

 

9,765

 

(240)

 

9,525

 

29.9%

Debt extinguishment costs

 

63

 

(63)

 

--

   

Other (income) expense, net

 

(191)

 

(37)

 

(228)

   

Earnings from Continuing Operations before taxes 

 

4,077

 

2,678

 

6,755

   

Tax expense on Earnings from Continuing Operations

 

390

 

555

 

945

   

Earnings from Continuing Operations

 

3,687

 

2,123

 

5,810

   

Diluted Earnings per Share from Continuing Operations

 

$2.06

 

$1.18

 

$3.24

   
 

Specified items reflect intangible amortization expense of $1.936 billion and other expenses of $742 million, primarily associated with acquisitions, restructuring actions and other expenses. See tables titled "Details of Specified Items" for additional details regarding specified items.

 
   

12M18

   

As
Reported
(GAAP)

 

Specified
Items

 

As
Adjusted 

 

% to
Sales

                 

Intangible Amortization

 

 

 

$2,178

 

 

$(2,178)

 

--

   

Gross Margin

 

15,694

 

2,453

 

18,147

 

59.3%

R&D

 

2,300

 

(87)

 

2,213

 

7.2%

SG&A

 

9,744

 

(365)

 

9,379

 

30.7%

Interest expense, net

 

721

 

(2)

 

719

   

Net foreign exchange (gain) loss

 

28

 

(29)

 

(1)

   

Debt extinguishment costs

 

167

 

(167)

 

--

   

Other (income) expense, net

 

(139)

 

3

 

(136)

   

Earnings from Continuing Operations before taxes

 

2,873

 

3,100

 

5,973

   

Tax expense on Earnings from Continuing Operations

 

539

 

303

 

842

   

Earnings from Continuing Operations

 

2,334

 

2,797

 

5,131

   

Diluted Earnings per Share from Continuing Operations

 

$1.31

 

$1.57

 

$2.88

   
 

Specified items reflect intangible amortization expense of $2.178 billion and other expenses of $922 million, primarily associated with acquisitions, restructuring actions and other expenses. See tables titled "Details of Specified Items" for additional details regarding specified items.

A reconciliation of the fourth-quarter tax rates for continuing operations for 2019 and 2018 is shown below:

     

4Q19

 

($ in millions)

 

Pre-Tax
Income

 

Taxes on
Earnings

 

Tax
Rate

 

As reported (GAAP)

 

$1,240

 

$191

 

15.4%

 

Specified items

 

714

 

58

     

Excluding specified items

 

$1,954

 

$249

 

12.8%

 
                 
     

4Q18

 

($ in millions)

 

Pre-Tax
Income

 

Taxes on
Earnings

 

Tax
Rate

 

As reported (GAAP)

 

$947

 

$292

 

30.8%

1)

Specified items

 

714

 

(75)

     

Excluding specified items

 

$1,661

 

$217

 

13.1%

 
   

1)

Reported tax rate on a GAAP basis for the fourth quarter of 2018 includes the impact of an additional $85 million of tax expense for the transition tax associated with the TCJA.

A reconciliation of the year-to-date tax rates for continuing operations for 2019 and 2018 is shown below:

     

12M19

 

($ in millions)

 

Pre-Tax
Income

 

Taxes on
Earnings

 

Tax
Rate

 

As reported (GAAP)

 

$4,077

 

$390

 

9.6%

2)

Specified items

 

2,678

 

555

     

Excluding specified items

 

$6,755

 

$945

 

14.0%

 
                 
     

12M18

 

($ in millions)

 

Pre-Tax
Income

 

Taxes on
Earnings

 

Tax
Rate

 

As reported (GAAP)

 

$2,873

 

$539

 

18.8%

3)

Specified items

 

3,100

 

303

     

Excluding specified items

 

$5,973

 

$842

 

14.1%

 
   

2)

Reported tax rate on a GAAP basis for 2019 includes the impact of a $86 million reduction of the transition tax associated with the TCJA and approximately $100 million in excess tax benefits associated with share-based compensation.

   

3)

Reported tax rate on a GAAP basis for 2018 includes the impact of an additional $120 million of tax expense for the transition tax associated with the TCJA, as well as the impact of approximately $90 million in excess tax benefits associated with share-based compensation.

 

Abbott Laboratories and Subsidiaries

Non-GAAP Reconciliation of Adjusted Historical Revenue

Year Ended December 31, 2019 and 2018

 ($ in millions) (unaudited)

 
   

12M19

 

12M18

 

% Change vs. 12M18

   

Abbott
Reported

   

Abbott
Reported

 

Discontinued
Businessa)

 

Adjusted
Revenue

     

Non-GAAP

             

Reported

 

Reported

 

Organicb)

                               

Total Company

 

31,904

   

30,578

 

(38)

 

30,540

 

4.3

 

4.5

 

7.7

U.S.

 

11,398

   

10,839

 

(38)

 

10,801

 

5.2

 

5.5

 

5.5

Int'l

 

20,506

   

19,739

 

--

 

19,739

 

3.9

 

3.9

 

8.8

Total Nutrition

 

7,409

   

7,229

 

(38)

 

7,191

 

2.5

 

3.0

 

5.3

U.S.

 

3,110

   

3,075

 

(38)

 

3,037

 

1.1

 

2.4

 

2.4

Int'l

 

4,299

   

4,154

 

--

 

4,154

 

3.5

 

3.5

 

7.5

Adult

 

3,248

   

3,132

 

(38)

 

3,094

 

3.7

 

5.0

 

7.9

U.S.

 

1,231

   

1,232

 

(38)

 

1,194

 

(0.1)

 

3.2

 

3.2

Int'l

 

2,017

   

1,900

 

--

 

1,900

 

6.2

 

6.2

 

10.9

                               

a)

Reflects sales related to a non-core product line within the U.S. Adult Nutrition business, which was discontinued during the third quarter 2018.

   

b)

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.

 

Abbott Laboratories and Subsidiaries

Details of Specified Items

Fourth Quarter Ended December 31, 2019

(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

 

$              34

 

$             28

 

$          483

 

$         --

 

$       545

R&D

 

(15)

 

(22)

 

--

 

(2)

 

(39)

SG&A

 

(39)

 

(23)

 

--

 

--

 

(62)

Debt extinguishment costs

 

--

 

--

 

--

 

(63)

 

(63)

Other (income) expense, net

 

(5)

 

--

 

--

 

--

 

(5)

Earnings from Continuing Operations before taxes

 

$              93

 

$             73

 

$          483

 

$       65

 

714

Tax expense on Earnings from Continuing Operations (d)

                 

58

Earnings from Continuing Operations

                 

$       656

Diluted Earnings per Share from Continuing Operations

                 

$      0.36

   

The table above provides additional details regarding the specified items described on the tables titled "Non-GAAP Reconciliation of Financial Information From Continuing Operations."

   

a)

Acquisition-related expenses include costs for tax and other services related to business acquisitions, integration costs which represent incremental costs directly related to integrating the acquired businesses and include expenditures for retention, severance, and the integration of systems, processes and business activities.

   

b)

Restructuring and cost reduction initiative expenses include severance, outplacement, asset impairments, 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.

   

c)

Other primarily relates to costs associated with the early extinguishment of debt.

   

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

Fourth Quarter Ended December 31, 2018

(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

 

$               7

 

$          488

 

$         4

 

$       520

R&D

 

(7)

 

5

 

--

 

--

 

(2)

SG&A

 

(82)

 

(9)

 

--

 

--

 

(91)

Net foreign exchange (gain) loss

 

--

 

(28)

 

--

 

--

 

(28)

Debt extinguishment costs

 

--

 

--

 

--

 

(86)

 

(86)

Other (income) expense, net

 

(1)

 

--

 

--

 

14

 

13

Earnings from Continuing Operations before taxes

 

$            111

 

$             39

 

$          488

 

$       76

 

714

Tax expense on Earnings from Continuing Operations (d)

                 

(75)

Earnings from Continuing Operations

                 

$       789

Diluted Earnings per Share from Continuing Operations

                 

$      0.44

 

The table above provides additional details regarding the specified items described on the tables titled "Non-GAAP Reconciliation of Financial Information From Continuing Operations."

   

a)

Acquisition-related expenses include costs for tax and other services related to business acquisitions, integration costs which represent incremental costs directly related to integrating the acquired businesses and include expenditures for retention, severance, and the integration of systems, processes and business activities, and fair value adjustments to contingent consideration related to a business acquisition.

   

b)

Restructuring and cost reduction initiative expenses include severance, outplacement, inventory write-downs, asset impairments, accelerated depreciation, 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.

   

c)

Other includes costs associated with the early extinguishment of debt, partially offset by a gain on investments.

   

d)

Reflects the net tax benefit associated with the specified items and additional tax expense for the transition tax associated with the TCJA.

 

Abbott Laboratories and Subsidiaries

Details of Specified Items

Year Ended December 31, 2019

(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

 

$            103

 

$            101

 

$        1,936

 

$         --

 

$    2,140

R&D

 

(38)

 

(44)

 

--

 

(116)

 

(198)

SG&A

 

(153)

 

(70)

 

--

 

(17)

 

(240)

Debt extinguishment costs

 

--

 

--

 

--

 

(63)

 

(63)

Other (income) expense, net

 

(15)

 

--

 

--

 

(22)

 

(37)

Earnings from Continuing Operations before taxes

 

$            309

 

$            215

 

$        1,936

 

$      218

 

2,678

Tax expense on Earnings from Continuing Operations (d)

                 

555

Earnings from Continuing Operations

                 

$    2,123

Diluted Earnings per Share from Continuing Operations

                 

$      1.18

   

The table above provides additional details regarding the specified items described on the tables titled "Non-GAAP Reconciliation of Financial Information From Continuing Operations."

   

a)

Acquisition-related expenses include costs for tax and other services related to business acquisitions, integration costs which represent incremental costs directly related to integrating the acquired businesses and include expenditures for retention, severance, and the integration of systems, processes and business activities, and fair value adjustments to contingent consideration related to a business acquisition.

   

b)

Restructuring and cost reduction initiative expenses include severance, outplacement, asset impairments, 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.

   

c)

Other relates to the acquisition of R&D assets, costs associated with the early extinguishment of debt, charges related to the impairment of certain assets, and expenses related to certain litigation settlements.

   

d) 

Reflects the net tax benefit associated with the specified items, a reduction in the transition tax associated with the TCJA and excess tax benefits associated with share-based compensation.

 

Abbott Laboratories and Subsidiaries

Details of Specified Items

Year Ended December 31, 2018

(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

 

$            123

 

$            106

 

$        2,178

 

$       46

 

$    2,453

R&D

 

(41)

 

1

 

--

 

(47)

 

(87)

SG&A

 

(346)

 

(19)

 

--

 

--

 

(365)

Interest expense, net

 

--

 

--

 

--

 

(2)

 

(2)

Net foreign exchange (gain) loss

 

--

 

(29)

 

--

 

--

 

(29)

Debt extinguishment costs

 

--

 

--

 

--

 

(167)

 

(167)

Other (income) expense, net

 

(2)

 

--

 

--

 

5

 

3

Earnings from Continuing Operations before taxes

 

$            512

 

$            153

 

$        2,178

 

$      257

 

3,100

Tax expense on Earnings from Continuing Operations (d)

                 

303

Earnings from Continuing Operations

                 

$    2,797

Diluted Earnings per Share from Continuing Operations

                 

$      1.57

 

The table above provides additional details regarding the specified items described on the tables titled "Non-GAAP Reconciliation of Financial Information From Continuing Operations."

   

a)

Acquisition-related expenses include costs for legal, accounting, tax, and other services related to business acquisitions, integration costs which represent incremental costs directly related to integrating the acquired businesses and include expenditures for consulting, retention, severance, and the integration of systems, processes and business activities, fair value adjustments to contingent consideration related to a business acquisition, and inventory step-up amortization.

   

b) 

Restructuring and cost reduction initiative expenses include severance, outplacement, inventory write-downs, asset impairments, accelerated depreciation, 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.

   

c)

Other includes the cost associated with the early extinguishment of debt, costs related to the acquisition of R&D assets and charges related to the impairment of certain assets, partially offset by a gain on investments.

   

d)

Reflects the net tax benefit associated with the specified items, additional tax expense for the transition tax associated with the TCJA and excess tax benefits associated with share-based compensation.

 

SOURCE Abbott

For further information: Abbott Financial, Scott Leinenweber, 224-668-0791, Michael Comilla, 224-668-1872, Laura Dauer, 224-667-2299; Abbott Media: Darcy Ross, 224-667-3655, Elissa Maurer, 224-668-3309
true
accessibility

You are about to exit for another Abbott country or region specific website

Please be aware that the website you have requested is intended for the residents of a particular country or countries, as noted on that site. As a result, the site may contain information on pharmaceuticals, medical devices and other products or uses of those products that are not approved in other countries or regions.


The website you have requested also may not be optimized for your specific screen size.

Do you wish to continue and exit this website?

accessibility

You are about to exit the Abbott family of websites for a 3rd party website

Links which take you out of Abbott worldwide websites are not under the control of Abbott, and Abbott is not responsible for the contents of any such site or any further links from such site. Abbott is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement of the linked site by Abbott.


The website that you have requested also may not be optimized for your screen size.

Do you wish to continue and exit this website?