Abbott Reports Second-Quarter 2024 Results and Raises Full-Year Guidance - Jul 18, 2024
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Abbott Reports Second-Quarter 2024 Results and Raises Full-Year Guidance
  • Sales of $10.4 billion driven by strong underlying base business performance
  • Reported sales growth of 4.0 percent; organic sales growth for underlying base business of 9.3 percent1, led by double-digit growth in Medical Devices
  • Continues to strengthen portfolio with new product approvals

ABBOTT PARK, Ill., July 18, 2024 /PRNewswire/ -- Abbott (NYSE: ABT) today announced financial results for the second quarter ended June 30, 2024.

  • Second-quarter GAAP diluted EPS of $0.74 and adjusted diluted EPS of $1.14, which excludes specified items.
  • Abbott raised its full-year 2024 EPS guidance range. Abbott projects full-year diluted EPS on a GAAP basis of $3.30 to $3.40 and projects adjusted diluted EPS of $4.61 to $4.71.
  • Abbott narrowed its full-year 2024 organic sales growth guidance range, excluding COVID-19 testing-related sales, to 9.5% to 10.0%, which represents an increase at the midpoint of the range2.
  • In April, Abbott announced U.S. Food and Drug Administration (FDA) approval of the Esprit below-the-knee (BTK) system, a breakthrough innovation for people living with peripheral artery disease. This system is designed to keep arteries open and deliver a drug to support vessel healing prior to completely dissolving.
  • In June, Abbott announced U.S. FDA clearance for two new over-the-counter continuous glucose monitoring systems — Lingoand Libre Rio, which are based on Abbott's world-leading FreeStyle Libre® continuous glucose monitoring technology3.
  • In June, Abbott obtained CE Mark for its AVEIR® dual chamber (DR) leadless pacemaker system, the world's first dual chamber leadless pacemaker system that treats people with abnormal or slow heart rhythms.
  • During the first half of 2024, Abbott announced 10 new growth opportunities coming from the company's highly productive R&D pipeline. These include a combination of new product approvals and new treatment indications.

"We achieved another quarter of strong growth in our underlying base business," said Robert B. Ford, chairman and chief executive officer, Abbott. "We have a lot of positive momentum heading into the second half of the year and are raising our full-year guidance."

SECOND-QUARTER BUSINESS OVERVIEW
Management believes that measuring sales growth rates on an organic basis, which excludes the impact of foreign exchange, the impact of discontinuing the ZonePerfect® product line in the Nutrition business, and the impact of the acquisition of Cardiovascular Systems, Inc. (CSI) during the first year post-acquisition, is an appropriate way for investors to best understand the core underlying performance of the business. Management further believes that measuring sales growth rates on an organic basis excluding COVID-19 tests is an appropriate way for investors to best understand underlying base business performance as the COVID-19 pandemic has shifted to an endemic state, resulting in significantly lower demand for COVID-19 tests.

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. 

Second Quarter 2024 Results (2Q24)


Sales 2Q24 ($ in millions)

Total Company


Nutrition


Diagnostics


Established
Pharmaceuticals


Medical Devices

U.S.

3,934


933


812



2,185

International

6,443


1,217


1,383


1,294


2,549

Total reported

10,377


2,150


2,195


1,294


4,734











% Change vs. 2Q23










U.S.

4.7


6.0


(15.5)


n/a


14.2

International

3.6


1.7


1.9


0.6


7.0

Total reported

4.0


3.5


(5.3)


0.6


10.2

Impact of foreign exchange

(3.5)


(3.6)


(3.8)


(7.5)


(2.2)

Impact of business exit and acquisition*

0.1


(0.4)




0.3

Organic

7.4


7.5


(1.5)


8.1


12.1

Impact of COVID-19 testing sales (4)

(1.9)



(7.4)



Organic (excluding COVID-19 tests)

9.3


7.5


5.9


8.1


12.1











    U.S.

9.0


6.9


(0.3)


n/a


13.5

    International

9.4


7.9


9.5


8.1


10.9


First Half 2024 Results (1H24)


Sales 1H24 ($ in millions)

Total Company


Nutrition


Diagnostics


Established
Pharmaceuticals


Medical Devices

U.S.

7,780


1,811


1,743



4,219

International

12,561


2,407


2,666


2,520


4,968

Total reported

20,341


4,218


4,409


2,520


9,187











% Change vs. 1H23










U.S.

1.2


7.0


(24.1)


n/a


14.3

International

4.3


2.4


(1.6)


1.8


10.3

Total reported

3.1


4.3


(11.9)


1.8


12.1

Impact of foreign exchange

(3.2)


(3.1)


(2.9)


(9.0)


(1.7)

Impact of business exit and acquisition*

0.2


(0.2)




0.7

Organic

6.1


7.6


(9.0)


10.8


13.1

Impact of COVID-19 testing sales (4)

(3.9)



(14.7)



Organic (excluding COVID-19 tests)

10.0


7.6


5.7


10.8


13.1











    U.S.

9.5


7.5


3.3


n/a


12.8

    International

10.3


7.7


7.1


10.8


13.4

 

Refer to table titled "Non-GAAP Revenue Reconciliation" for a reconciliation of adjusted historical revenue to reported revenue.

*Reflects the impact of discontinuing the ZonePerfect® product line in the Nutrition business in March 2024 and the acquisition of CSI on April 27, 2023. Organic sales growth excludes the impact of the acquired business from January through April 2024.

Nutrition


Second Quarter 2024 Results (2Q24)


Sales 2Q24 ($ in millions)

Total


Pediatric


Adult

U.S.

933


564


369

International

1,217


495


722

Total reported

2,150


1,059


1,091







% Change vs. 2Q23






U.S.

6.0


11.3


(1.2)

International

1.7


(4.4)


6.4

Total reported

3.5


3.4


3.7

Impact of foreign exchange

(3.6)


(1.6)


(5.4)

Impact of business exit*

(0.4)



(0.8)

Organic

7.5


5.0


9.9







    U.S.

6.9


11.3


0.8

    International

7.9


(1.0)


14.7

 

Worldwide Nutrition sales increased 3.5 percent on a reported basis and 7.5 percent on an organic basis in the second quarter.

In Pediatric Nutrition, global sales increased 3.4 percent on a reported basis and 5.0 percent on an organic basis. Sales in the U.S. reflect continued market share gains in the infant formula business.

In Adult Nutrition, global sales increased 3.7 percent on a reported basis and 9.9 percent on an organic basis, which was led by strong growth of Ensure®, Abbott's market-leading complete and balanced nutrition brand.

First Half 2024 Results (1H24)


Sales 1H24 ($ in millions)

Total


Pediatric


Adult

U.S.

1,811


1,078


733

International

2,407


990


1,417

Total reported

4,218


2,068


2,150







% Change vs. 1H23






U.S.

7.0


11.6


0.8

International

2.4


0.7


3.6

Total reported

4.3


6.1


2.6

Impact of foreign exchange

(3.1)


(1.5)


(4.6)

Impact of business exit*

(0.2)



(0.4)

Organic

7.6


7.6


7.6







    U.S.

7.5


11.6


1.9

    International

7.7


3.7


10.5


*Reflects the impact of discontinuing the ZonePerfect® product line. This action was initiated in March 2024.

 

Diagnostics


Second Quarter 2024 Results (2Q24)


Sales 2Q24 ($ in millions)

Total


Core Laboratory


Molecular


Point of Care


Rapid
Diagnostics

U.S.

812


327


33


107


345

International

1,383


1,002


94


49


238

Total reported

2,195


1,329


127


156


583











% Change vs. 2Q23










U.S.

(15.5)


5.1


(22.5)


8.1


(32.1)

International

1.9


2.1


(4.9)


14.1


2.1

Total reported

(5.3)


2.8


(10.3)


9.9


(21.3)

Impact of foreign exchange

(3.8)


(5.8)


(0.9)


(0.1)


(1.5)

Organic

(1.5)


8.6


(9.4)


10.0


(19.8)

Impact of COVID-19 testing sales (4)

(7.4)


(0.2)


(3.8)



(20.2)

Organic (excluding COVID-19 tests)

5.9


8.8


(5.6)


10.0


0.4











    U.S.

(0.3)


5.3


(19.0)


8.1


(6.6)

    International

9.5


9.9



14.5


11.0

 

As expected, Diagnostics sales growth in the second quarter was negatively impacted by year-over-year declines in COVID-19 testing-related sales4. Worldwide COVID-19 testing sales were $102 million in the second quarter of 2024 compared to $263 million in the second quarter of the prior year.

Excluding COVID-19 testing-related sales, global Diagnostics sales increased 1.8 percent on a reported basis and 5.9 percent on an organic basis.

Excluding COVID-19 testing-related sales, global Core Laboratory Diagnostics sales increased 3.0 percent on a reported basis and 8.8 percent on an organic basis, led by continued strong adoption of Abbott's Alinity® family of diagnostics systems and testing portfolios. 

First Half 2024 Results (1H24)


Sales 1H24 ($ in millions)

Total


Core Laboratory


Molecular


Point of Care


Rapid
Diagnostics

U.S.

1,743


637


75


205


826

International

2,666


1,897


181


90


498

Total reported

4,409


2,534


256


295


1,324











% Change vs. 1H23










U.S.

(24.1)


6.2


(16.3)


6.9


(41.6)

International

(1.6)


1.2


(8.8)


6.9


(9.7)

Total reported

(11.9)


2.4


(11.1)


6.9


(32.7)

Impact of foreign exchange

(2.9)


(4.9)


(0.6)



(1.1)

Organic

(9.0)


7.3


(10.5)


6.9


(31.6)

Impact of COVID-19 testing sales (4)

(14.7)


(0.3)


(7.3)



(34.6)

Organic (excluding COVID-19 tests)

5.7


7.6


(3.2)


6.9


3.0











    U.S.

3.3


6.5


(6.7)


6.9


0.3

    International

7.1


7.9


(1.8)


7.1


7.1

 

Established Pharmaceuticals


Second Quarter 2024 Results (2Q24)


Sales 2Q24 ($ in millions)

Total


Key Emerging
Markets


Other

U.S.



International

1,294


988


306

Total reported

1,294


988


306







% Change vs. 2Q23






U.S.

n/a


n/a


n/a

International

0.6


(0.2)


3.1

Total reported

0.6


(0.2)


3.1

Impact of foreign exchange

(7.5)


(9.0)


(2.6)

Organic

8.1


8.8


5.7







    U.S.

n/a


n/a


n/a

    International

8.1


8.8


5.7

 

Established Pharmaceuticals sales increased 0.6 percent on a reported basis and 8.1 percent on an organic basis in the second quarter.

Key Emerging Markets include several emerging countries that represent the most attractive long-term growth opportunities for Abbott's branded generics product portfolio. Sales in these geographies decreased 0.2 percent on a reported basis and increased 8.8 percent on an organic basis, led by growth in several geographies and therapeutic areas, including cardiometabolic, gastroenterology, and central nervous system/pain management.

First Half 2024 Results (1H24)


Sales 1H24 ($ in millions)

Total


Key Emerging
Markets


Other

U.S.



International

2,520


1,916


604

Total reported

2,520


1,916


604







% Change vs. 1H23






U.S.

n/a


n/a


n/a

International

1.8


0.7


5.3

Total reported

1.8


0.7


5.3

Impact of foreign exchange

(9.0)


(11.3)


(1.6)

Organic

10.8


12.0


6.9







    U.S.

n/a


n/a


n/a

    International

10.8


12.0


6.9

 

Medical Devices


Second Quarter 2024 Results (2Q24)

Sales 2Q24 ($ in millions)

Total


Rhythm
Management


Electro-

physiology


Heart
Failure


Vascular


Structural
Heart


Neuro-
modulation


Diabetes
Care

U.S.

2,185


292


287


244


275


258


192


637

International

2,549


315


340


77


449


306


51


1,011

Total reported

4,734


607


627


321


724


564


243


1,648

















% Change vs. 2Q23
















U.S.

14.2


8.5


16.8


7.7


4.3


17.9


3.7


26.3

International

7.0


0.4


10.5


11.4


(0.4)


9.4


21.7


10.0

Total reported

10.2


4.2


13.3


8.6


1.3


13.2


7.0


15.8

Impact of foreign exchange

(2.2)


(1.7)


(3.4)


(0.3)


(2.0)


(2.4)


(1.2)


(2.4)

Impact of acquisition*

0.3





2.1




Organic

12.1


5.9


16.7


8.9


1.2


15.6


8.2


18.2

















    U.S.

13.5


8.5


16.8


7.7


(0.8)


17.9


3.7


26.3

    International

10.9


3.7


16.7


12.8


2.5


13.8


28.4


13.7

 

Worldwide Medical Devices sales increased 10.2 percent on a reported basis and 12.1 percent on an organic basis in the second quarter, including double-digit organic growth in both the U.S. and internationally.

Sales growth was led by double-digit growth in Diabetes Care, Electrophysiology, and Structural Heart. Several recently launched products and new indications contributed to the strong performance, including Amplatzer® Amulet®, Navitor®, TriClip®, and AVEIR®.

In Electrophysiology, sales grew 13.3 percent on a reported basis and 16.7 percent on an organic basis, which included double-digit growth in catheters and cardiac mapping-related products, and double-digit growth in all major geographic regions.

In Diabetes Care, FreeStyle Libre sales were $1.6 billion, which represents sales growth of 18.4 percent on a reported basis and 20.4 percent on an organic basis.

First Half 2024 Results (1H24)


Sales 1H24 ($ in millions)

Total


Rhythm
Management


Electro-

physiology


Heart
Failure


Vascular


Structural
Heart


Neuro-
modulation


Diabetes
Care

U.S.

4,219


563


556


481


529


491


373


1,226

International

4,968


606


658


145


884


588


96


1,991

Total reported

9,187


1,169


1,214


626


1,413


1,079


469


3,217

















% Change vs. 1H23
















U.S.

14.3


6.6


15.0


8.2


9.8


14.4


9.6


24.6

International

10.3


4.4


14.4


9.7


4.1


10.9


15.9


13.6

Total reported

12.1


5.4


14.7


8.6


6.1


12.5


10.9


17.6

Impact of foreign exchange

(1.7)


(1.3)


(2.8)


(0.1)


(1.5)


(1.8)


(1.6)


(1.8)

Impact of acquisition*

0.7





4.3




Organic

13.1


6.7


17.5


8.7


3.3


14.3


12.5


19.4

















    U.S.

12.8


6.6


15.0


8.2


(1.3)


14.4


9.6


24.6

    International

13.4


6.8


19.6


10.1


6.0


14.3


24.1


16.5


*Abbott completed the acquisition of CSI on April 27, 2023. For purposes of calculating organic sales growth, the impact from this acquired business has been excluded from January through April 2024.

 

ABBOTT'S EARNINGS-PER-SHARE GUIDANCE
Abbott projects full-year 2024 diluted earnings per share under GAAP of $3.30 to $3.40. Abbott forecasts specified items for the full-year 2024 of $1.31 per share primarily related to intangible amortization, restructuring and cost reduction initiatives and other net expenses. Excluding specified items, projected adjusted diluted earnings per share would be $4.61 to $4.71 for the full-year 2024.

Abbott projects third-quarter 2024 diluted earnings per share under GAAP of $0.85 to $0.89. Abbott forecasts specified items for the third-quarter 2024 of $0.33 per share primarily related to intangible amortization, restructuring and cost reduction initiatives and other net expenses. Excluding specified items, projected adjusted diluted earnings per share would be $1.18 to $1.22 for the third quarter 2024.

ABBOTT DECLARES 402ND CONSECUTIVE QUARTERLY DIVIDEND
On June 14, 2024, the board of directors of Abbott declared the company's quarterly dividend of $0.55 per share. Abbott's cash dividend is payable Aug. 15, 2024, to shareholders of record at the close of business on July 15, 2024.

Abbott has increased its dividend payout for 52 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 114,000 colleagues serve people in more than 160 countries.

Connect with us at www.abbott.com and on LinkedInFacebookInstagram, X and YouTube.

Abbott will live-webcast its second-quarter earnings conference call through its Investor Relations website at www.abbottinvestor.com at 8 a.m. Central time today. An archived edition of the webcast will be available later in the 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" in our Annual Report on Form 10-K for the year ended Dec. 31, 2023, and are incorporated herein 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

In the second quarter of 2024, total worldwide sales were $10.377 billion and COVID-19 testing-related sales were $102 million. In the second quarter of 2023, total worldwide sales were $9.978 billion and COVID-19 testing-related sales were $263 million.



2

Abbott has not provided the related GAAP financial measure for organic sales growth, excluding COVID-19 testing-related sales, on a forward-looking basis because the company is unable to predict with reasonable certainty the impact of foreign exchange due to the unpredictability of future changes in foreign exchange rates, which could significantly impact reported sales growth. In addition, as the COVID-19 pandemic has shifted to an endemic state, the company has determined that it is unable to predict with reasonable certainty future COVID-19 test sales due to the unpredictability of demand for COVID-19 tests.



3

Data on file. Abbott Diabetes Care.



4

Diagnostic sales and COVID-19 testing-related sales in 2024 and 2023 are summarized below:

 


Sales 2Q24



COVID Tests Sales 2Q24

($ in millions)

U.S.


Int'l


Total



U.S.


Int'l


Total

Total Diagnostics

812


1,383


2,195



69


33


102

Core Laboratory

327


1,002


1,329



1


1


2

Molecular

33


94


127



2


1


3

Rapid Diagnostics

345


238


583



66


31


97















Sales 2Q23



COVID Tests Sales 2Q23

($ in millions)

U.S.


Int'l


Total



U.S.


Int'l


Total

Total Diagnostics

961


1,356


2,317



216


47


263

Core Laboratory

311


982


1,293



2


3


5

Molecular

43


98


141



4


4


8

Rapid Diagnostics

508


233


741



210


40


250















Sales 1H24



COVID Tests Sales 1H24

($ in millions)

U.S.


Int'l


Total



U.S.


Int'l


Total

Total Diagnostics

1,743


2,666


4,409



222


84


306

Core Laboratory

637


1,897


2,534



2


3


5

Molecular

75


181


256



5


2


7

Rapid Diagnostics

826


498


1,324



215


79


294















Sales 1H23



COVID Tests Sales 1H23

($ in millions)

U.S.


Int'l


Total



U.S.


Int'l


Total

Total Diagnostics

2,296


2,709


5,005



824


169


993

Core Laboratory

600


1,875


2,475



4


7


11

Molecular

90


198


288



14


14


28

Rapid Diagnostics

1,414


552


1,966



806


148


954

 

Abbott Laboratories and Subsidiaries

Condensed Consolidated Statement of Earnings

Second Quarter Ended June 30, 2024 and 2023

(in millions, except per share data)

(unaudited)





2Q24


2Q23


% Change


Net Sales

$10,377


$9,978


4.0









Cost of products sold, excluding amortization expense

4,603


4,483


2.7


Amortization of intangible assets

471


498


(5.6)


Research and development

698


715


(2.3)


Selling, general, and administrative

2,936


2,740


7.1


Total Operating Cost and Expenses

8,708


8,436


3.2









Operating Earnings

1,669


1,542


8.2









Interest expense, net

58


61


(5.1)


Net foreign exchange (gain) loss

(6)


21


n/m


Other (income) expense, net

10


(176)


n/m


Earnings before taxes

1,607


1,636


(1.8)


Taxes on earnings

305


261


17.1

1)








Net Earnings

$1,302


$1,375


(5.3)









Net Earnings excluding Specified Items, as described below

$2,003


$1,893


5.8

2)








Diluted Earnings per Common Share

$0.74


$0.78


(5.1)









Diluted Earnings per Common Share,

excluding Specified Items, as described below

$1.14


$1.08


5.6

2)








Average Number of Common Shares Outstanding

Plus Dilutive Common Stock Options

1,751


1,750





NOTES:

See table tilted "Non-GAAP Reconciliation of Financial Information" for an explanation of certain non-GAAP financial information.

n/m = Percent change is not meaningful.

See footnotes on the following section.


1)

2024 Taxes on Earnings includes the recognition of approximately $25 million of net tax expense as a result of the resolution of various tax positions related to prior years.




2023 Taxes on Earnings includes the recognition of approximately $40 million of net tax expense as a result of the resolution of various tax positions related to prior years.



2)

2024 Net Earnings and Diluted Earnings per Common Share, excluding Specified Items, excludes net after-tax charges of $701 million, or $0.40 per share, for intangible amortization, charges related to restructuring and cost reduction initiatives, expenses associated with acquisitions and a divestiture, and other net expenses.




2023 Net Earnings and Diluted Earnings per Common Share, excluding Specified Items, excludes net after-tax charges of $518 million, or $0.30 per share, for intangible amortization, charges related to restructuring and cost reduction initiatives, expenses associated with acquisitions and other net expenses.

 

Abbott Laboratories and Subsidiaries

Condensed Consolidated Statement of Earnings

First Half Ended June 30, 2024 and 2023

(in millions, except per share data)

(unaudited)





1H24


1H23


% Change


Net Sales

$20,341


$19,725


3.1









Cost of products sold, excluding amortization expense

9,066


8,814


2.9


Amortization of intangible assets

943


989


(4.7)


Research and development

1,382


1,369


0.9


Selling, general, and administrative

5,895


5,502


7.1


Total Operating Cost and Expenses

17,286


16,674


3.7









Operating Earnings

3,055


3,051


0.2









Interest expense, net

119


113


5.6


Net foreign exchange (gain) loss

(6)


27


n/m


Other (income) expense, net

(101)


(287)


n/m


Earnings before taxes

3,043


3,198


(4.8)


Taxes on earnings

516


505


2.2

1)








Net Earnings

$2,527


$2,693


(6.2)









Net Earnings excluding Specified Items, as described below

$3,732


$3,708


0.7

2)








Diluted Earnings per Common Share

$1.44


$1.53


(5.9)









Diluted Earnings per Common Share,

excluding Specified Items, as described below

$2.12


$2.11


0.5

2)








Average Number of Common Shares Outstanding

Plus Dilutive Common Stock Options

1,750


1,751





NOTES:

See table tilted "Non-GAAP Reconciliation of Financial Information" for an explanation of certain non-GAAP financial information.

n/m = Percent change is not meaningful.

See footnotes on the following section.



1)

2024 Taxes on Earnings includes the recognition of approximately $35 million of net tax expense as a result of the resolution of various tax positions related to prior years.




2023 Taxes on Earnings includes the recognition of approximately $62 million of net tax expense as a result of the resolution of various tax positions related to prior years.



2)

2024 Net Earnings and Diluted Earnings per Common Share, excluding Specified Items, excludes net after-tax charges of $1.205 billion, or $0.68 per share, for intangible amortization, charges related to restructuring and cost reduction initiatives, expenses associated with acquisitions and a divestiture, and other net expenses.




2023 Net Earnings and Diluted Earnings per Common Share, excluding Specified Items, excludes net after-tax charges of $1.015 billion, or $0.58 per share, for intangible amortization, charges related to restructuring and cost reduction initiatives, expenses associated with acquisitions and other net expenses.

 

Abbott Laboratories and Subsidiaries

Non-GAAP Reconciliation of Financial Information

Second Quarter Ended June 30, 2024 and 2023

(in millions, except per share data)

(unaudited)



2Q24


As

Reported
(GAAP)


Specified
Items


As

Adjusted







Intangible Amortization

$            471


$          (471)


$              —

Gross Margin

5,303


506


5,809

R&D

698


(41)


657

SG&A

2,936


(57)


2,879

Other (income) expense, net

10


(145)


(135)

Earnings before taxes

1,607


749


2,356

Taxes on Earnings

305


48


353

Net Earnings

1,302


701


2,003

Diluted Earnings per Share

$           0.74


$           0.40


$           1.14

 

Specified items reflect intangible amortization expense of $471 million and other net expenses of $278 million associated with restructuring actions, acquisitions, a divestiture and other net expenses. See table titled "Details of Specified Items" for additional details regarding specified items.


2Q23


As

Reported
(GAAP)


Specified
Items


As

Adjusted







Intangible Amortization

$            498


$          (498)


$              —

Gross Margin

4,997


529


5,526

R&D

715


(72)


643

SG&A

2,740


(22)


2,718

Other (income) expense, net

(176)


57


(119)

Earnings before taxes

1,636


566


2,202

Taxes on Earnings

261


48


309

Net Earnings

1,375


518


1,893

Diluted Earnings per Share

$           0.78


$           0.30


$           1.08

 

Specified items reflect intangible amortization expense of $498 million and other net expenses of $68 million associated with restructuring actions, costs associated with acquisitions and other net expenses. See table titled "Details of Specified Items" for additional details regarding specified items.

Abbott Laboratories and Subsidiaries

Non-GAAP Reconciliation of Financial Information

First Half Ended June 30, 2024 and 2023

(in millions, except per share data)

(unaudited)



1H24


As

Reported
(GAAP)


Specified
Items


As

Adjusted







Intangible Amortization

$            943


$          (943)


$              —

Gross Margin

10,332


1,024


11,356

R&D

1,382


(62)


1,320

SG&A

5,895


(91)


5,804

Other (income) expense, net

(101)


(171)


(272)

Earnings before taxes

3,043


1,348


4,391

Taxes on Earnings

516


143


659

Net Earnings

2,527


1,205


3,732

Diluted Earnings per Share

$           1.44


$           0.68


$           2.12

 

Specified items reflect intangible amortization expense of $943 million and other net expenses of $405 million associated with restructuring actions, acquisitions, a divestiture and other net expenses. See table titled "Details of Specified Items" for additional details regarding specified items.


1H23


As

Reported
(GAAP)


Specified
Items


As

Adjusted







Intangible Amortization

$            989


$          (989)


$              —

Gross Margin

9,922


1,049


10,971

R&D

1,369


(98)


1,271

SG&A

5,502


(24)


5,478

Other (income) expense, net

(287)


57


(230)

Earnings before taxes

3,198


1,114


4,312

Taxes on Earnings

505


99


604

Net Earnings

2,693


1,015


3,708

Diluted Earnings per Share

$           1.53


$           0.58


$           2.11

 

Specified items reflect intangible amortization expense of $989 million and other net expenses of $125 million associated with restructuring actions, costs associated with acquisitions and other expenses. See table titled "Details of Specified Items" for additional details regarding specified items.

A reconciliation of the second-quarter tax rates for 2024 and 2023 is shown below: 


2Q24


($ in millions)

Pre-Tax

Income


Taxes on

Earnings


Tax

Rate


As reported (GAAP)

$         1,607


$            305


19.0 %

1)

Specified items

749


48




Excluding specified items

$         2,356


$            353


15.0 %










2Q23


($ in millions)

Pre-Tax

Income


Taxes on

Earnings


Tax

Rate


As reported (GAAP)

$         1,636


$            261


15.9 %

2)

Specified items

566


48




Excluding specified items

$         2,202


$            309


14.0 %




1)

2024 Taxes on Earnings includes the recognition of approximately $25 million of net tax expense as a result of the resolution of various tax positions related to prior years.



2)

2023 Taxes on Earnings includes the recognition of approximately $40 million of net tax expense as a result of the resolution of various tax positions related to prior years.

 

A reconciliation of the year-to-date tax rates for 2024 and 2023 is shown below:


1H24


($ in millions)

Pre-Tax

Income


Taxes on

Earnings


Tax

Rate


As reported (GAAP)

$         3,043


$            516


17.0 %

3)

Specified items

1,348


143




Excluding specified items

$         4,391


$            659


15.0 %










1H23


($ in millions)

Pre-Tax

Income


Taxes on

Earnings


Tax

Rate


As reported (GAAP)

$         3,198


$            505


15.8 %

4)

Specified items

1,114


99




Excluding specified items

$         4,312


$            604


14.0 %




3)

2024 Taxes on Earnings includes the recognition of approximately $35 million of net tax expense as a result of the resolution of various tax positions related to prior years.



4)

2023 Taxes on Earnings includes the recognition of approximately $62 million of net tax expense as a result of the resolution of various tax positions related to prior years.

 

Abbott Laboratories and Subsidiaries

Non-GAAP Revenue Reconciliation

Second Quarter and First Half Ended June 30, 2024 and 2023

($ in millions)

(unaudited)




2Q24


2Q23


% Change vs. 2Q23














Non-GAAP



Abbott
Reported

Impact of
acquisition
(a)

Impact
from
business
exit (b)

Adjusted
Revenue


Abbott
Reported

Impact
from
business
exit (b)

Adjusted
Revenue


Reported


Adjusted

Organic

Total Company


10,377

(15)

(8)

10,354


9,978

(15)

9,963


4.0


3.9

7.4

U.S.


3,934

(13)

(8)

3,913


3,758

(15)

3,743


4.7


4.6

4.6

Intl


6,443

(2)

6,441


6,220

6,220


3.6


3.5

9.2
















Total Nutrition


2,150

(8)

2,142


2,076

(15)

2,061


3.5


3.9

7.5

U.S.


933

(8)

925


881

(15)

866


6.0


6.9

6.9

Intl


1,217

1,217


1,195

1,195


1.7


1.7

7.9
















Adult Nutrition


1,091

(8)

1,083


1,052

(15)

1,037


3.7


4.5

9.9

U.S.


369

(8)

361


374

(15)

359


(1.2)


0.8

0.8

Intl


722

722


678

678


6.4


6.4

14.7
















Total Medical Devices 


4,734

(15)

4,719


4,295

4,295


10.2


9.9

12.1

U.S.


2,185

(13)

2,172


1,913

1,913


14.2


13.5

13.5

Intl


2,549

(2)

2,547


2,382

2,382


7.0


7.0

10.9
















Vascular


724

(15)

709


715

715


1.3


(0.8)

1.2

U.S.


275

(13)

262


264

264


4.3


(0.8)

(0.8)

Intl


449

(2)

447


451

451


(0.4)


(0.6)

2.5

 



1H24


1H23


% Change vs. 1H23













Non-GAAP



Abbott
Reported

Impact of
acquisition (a)

Impact
from
business
exit (b)

Adjusted
Revenue


Abbott
Reported

Impact
from
business
exit (b)

Adjusted
Revenue


Reported

Adjusted

Organic

Total Company


20,341

(57)

(8)

20,276


19,725

(15)

19,710


3.1

2.9

6.1

U.S.


7,780

(53)

(8)

7,719


7,686

(15)

7,671


1.2

0.6

0.6

Intl


12,561

(4)

12,557


12,039

12,039


4.3

4.3

9.6















Total Nutrition


4,218

(8)

4,210


4,043

(15)

4,028


4.3

4.5

7.6

U.S.


1,811

(8)

1,803


1,693

(15)

1,678


7.0

7.5

7.5

Intl


2,407

2,407


2,350

2,350


2.4

2.4

7.7















Adult Nutrition


2,150

(8)

2,142


2,095

(15)

2,080


2.6

3.0

7.6

U.S.


733

(8)

725


727

(15)

712


0.8

1.9

1.9

Intl


1,417

1,417


1,368

1,368


3.6

3.6

10.5















Total Medical Devices


9,187

(57)

9,130


8,195

8,195


12.1

11.4

13.1

U.S.


4,219

(53)

4,166


3,691

3,691


14.3

12.8

12.8

Intl


4,968

(4)

4,964


4,504

4,504


10.3

10.2

13.4















Vascular


1,413

(57)

1,356


1,332

1,332


6.1

1.8

3.3

U.S.


529

(53)

476


482

482


9.8

(1.3)

(1.3)

Intl


884

(4)

880


850

850


4.1

3.6

6.0


(a) Abbott completed the acquisition of CSI on April 27, 2023. For purposes of calculating organic sales growth, the impact from this acquired business has been excluded from January through April 2024.

(b) Reflects the impact of discontinuing the ZonePerfect® product line in the Nutrition business. This action was initiated in March 2024.

 

Abbott Laboratories and Subsidiaries

Details of Specified Items

Second Quarter Ended June 30, 2024

(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

$                    1


$                  32


$                471


$                    2


$                506

R&D

(1)


1



(41)


(41)

SG&A

(11)


(10)



(36)


(57)

Other (income) expense, net

(147)




2


(145)

Earnings before taxes

$                160


$                  41


$                471


$                  77


749

Taxes on Earnings (d)









48

Net Earnings









$                701

Diluted Earnings per Share









$               0.40



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



a)

Includes the loss on the sale of a non-core business. Acquisition-related expenses include integration costs, which represent incremental costs directly related to integrating acquired businesses.



b)

Restructuring and cost reduction initiative expenses include severance, outplacement and other direct costs associated with specific restructuring plans and cost reduction initiatives.



c)

Other includes incremental costs to comply with the European Union's Medical Device Regulations (MDR) and In Vitro Diagnostics Medical Device Regulations (IVDR) requirements for previously approved products and an intangible asset impairment charge.



d)

Reflects the net tax benefit associated with the specified items and tax expense as a result of the resolution of various tax positions related to prior years.

 

Abbott Laboratories and Subsidiaries

Details of Specified Items

Second Quarter Ended June 30, 2023

(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

$                    7


$                  11


$                498


$                  13


$                529

R&D

(8)


7



(71)


(72)

SG&A

(17)


(2)



(3)


(22)

Other (income) expense, net

47




10


57

Earnings before taxes

$                (15)


$                    6


$                498


$                  77


566

Taxes on Earnings (d)









48

Net Earnings









$                518

Diluted Earnings per Share









$               0.30



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



a)

Acquisition-related expenses include legal and other costs related to business acquisitions as well as integration costs, which represent incremental costs directly related to integrating acquired businesses. These costs were more than offset by fair value adjustments to contingent consideration related to business acquisitions.



b)

Restructuring and cost reduction initiative expenses include severance, outplacement and other direct costs associated with specific restructuring plans and cost reduction initiatives.



c)

Other includes incremental costs to comply with the European Union's Medical Device Regulations (MDR) and In Vitro Diagnostics Medical Device Regulations (IVDR) requirements for previously approved products and charges for intangible asset impairments.



d)

Reflects the net tax benefit associated with the specified items and tax expense as a result of the resolution of various tax positions related to prior years.

 

Abbott Laboratories and Subsidiaries

Details of Specified Items

First Half Ended June 30, 2024

(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

$                    2


$                  74


$                943


$                    5


$             1,024

R&D

(4)


(1)



(57)


(62)

SG&A

(25)


(19)



(47)


(91)

Other (income) expense, net

(135)




(36)


(171)

Earnings before taxes

$                166


$                  94


$                943


$                145


1,348

Taxes on Earnings (d)









143

Net Earnings









$             1,205

Diluted Earnings per Share









$               0.68



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



a)

Includes the loss on the sale of a non-core business. Acquisition-related expenses include integration costs, which represent incremental costs directly related to integrating acquired businesses, as well as other costs related to business acquisitions.



b)

Restructuring and cost reduction initiative expenses include severance, outplacement and other direct costs associated with specific restructuring plans and cost reduction initiatives.



c)

Other includes incremental costs to comply with the MDR and IVDR regulations for previously approved products and charges for investment and intangible asset impairments.



d)

Reflects the net tax benefit associated with the specified items and tax expense as a result of the resolution of various tax positions related to prior years.

 

Abbott Laboratories and Subsidiaries

Details of Specified Items

First Half Ended June 30, 2023

(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

$                  12


$                  32


$                989


$                  16


$             1,049

R&D

(12)


8



(94)


(98)

SG&A

(21)


(6)



3


(24)

Other (income) expense, net

41




16


57

Earnings before taxes

$                    4


$                  30


$                989


$                  91


1,114

Taxes on Earnings (d)









99

Net Earnings









$             1,015

Diluted Earnings per Share









$               0.58



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



a)

Acquisition-related expenses include legal and other costs related to business acquisitions as well as integration costs, which represent incremental costs directly related to integrating acquired businesses. These costs were partially offset by fair value adjustments to contingent consideration related to business acquisitions.



b)

Restructuring and cost reduction initiative expenses include severance, outplacement and other direct costs associated with specific restructuring plans and cost reduction initiatives.



c)

Other includes incremental costs to comply with the MDR and IVDR regulations for previously approved products and charges for intangible asset impairments.



d)

Reflects the net tax benefit associated with the specified items and tax expense as a result of the resolution of various tax positions related to prior years.

 

 

SOURCE Abbott

For further information: Abbott Financial: Michael Comilla, 224-668-1872; Tamika LeBean, 224-399-5082; Ryan Aliff, 224-667-2299; Abbott Media: Karen Twigg May, 224-668-2681; Kate Dyer, 224-668-9965
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