Abbott Laboratories ABT reported fourth-quarter 2024 adjusted earnings per share (EPS) of $1.34, in line with the Zacks Consensus Estimate. However, the figure improved 12.6% from the prior-year quarter’s level. 

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GAAP EPS came in at $5.27 cents compared with 91 cents in the fourth quarter of 2023.

Full-year adjusted EPS was $4.67, reflecting a 5.2% increase from the 2023 figure. The figure came in line with the Zacks Consensus Estimate.

Following the earnings announcement, ABT stock fell 1.8% at pre-market trading today. 

ABT’s Revenues

Worldwide sales of $10.97 billion were up 7.2% year over year on a reported basis. The top line missed the Zacks Consensus Estimate by 0.4%.

Organically, sales improved 8.8% year over year. Organic sales, ex-COVID rose 10.1% year over year.

Full-year worldwide sales totaled $41.95 billion, up 4.6% from the 2023 level. The figure, however, missed the Zacks Consensus Estimate by 0.1%

ABT’s Q4 Results in Detail

Abbott operates through four segments — Established Pharmaceuticals, Medical Devices, Nutrition and Diagnostics.

In the fourth quarter, Established Pharmaceuticals’ product sales increased 3.8% on a reported basis (8.5% on an organic basis) to $1.27 billion.

Organic sales in key emerging markets improved 8.8% year over year. This was led by growth in several geographies and therapeutic areas, including gastroenterology, women's health, and central nervous system/pain management.

In the fourth quarter, the Medical Devices segment’s sales rose 13.7% year over year on a reported basis (14.0% on an organic basis) to $5.05 billion.

Sales growth was led by double-digit growth in Diabetes Care and Structural Heart. Several products, including FreeStyle Libre, Navitor, TriClip, Amplatzer Amulet and AVEIR, contributed to the strong performance.

The Diabetes Care division reported organic sales growth of 20.6% year over year, led by sales of continuous glucose monitors, which accounted for $1.8 billion. Structural Heart sales rose 22.6%, and Heart Failure sales improved 9.6% year over year organically.

The Vascular division recorded organic sales growth of 6.8%. The Electrophysiology, Rhythm Management and Neuromodulation divisions recorded organic growth of 8.8%, 7.2% and 8.4%, respectively, in the quarter under review.

For the fourth quarter, Nutrition sales rose 4.5% year over year on a reported basis (up 7.1% on an organic basis) to $2.13 billion.

Pediatric Nutrition sales were up 2.5%, and Adult Nutrition sales improved 11.4% organically. According to the company, Adult Nutrition sales benefited from the strong global growth of Ensure and Glucerna, Abbott's market-leading brands. 

For the fourth quarter, Diagnostics sales were down 0.6% year over year on a reported basis (up 1% on an organic basis) to $2.52 billion. Organic sales ex-COVID rose 6.1% year over year.

Core Laboratory Diagnostics sales were up 3.8% organically. Molecular Diagnostics’ sales declined 10.2% on an organic basis. Rapid Diagnostics sales were down 1%. Point of Care Diagnostics sales declined 1.4%.

Margin Details of ABT

In the fourth quarter, the gross profit rose 6.1% year over year to $6.03 billion despite an 8.5% increase in the cost of products sold (excluding amortization expense). The gross margin contracted 55 basis points (bps) to 55%.

Abbott Laboratories Price, Consensus and EPS Surprise

Abbott Laboratories price-consensus-eps-surprise-chart | Abbott Laboratories Quote

Selling, general and administration expenses rose 6.7% year over year to $2.91 billion. Research and development expenses rose 7% year over year to $749 million. The company reported an adjusted operating profit of $2.38 billion, up 5.1% year over year. Also, the adjusted operating margin contracted 43 bps to 21.6%.

2025 Guidance

Abbott provided its full-year 2025 guidance.

The company expects full-year adjusted diluted EPS to be in the range of $5.05-$5.25. The Zacks Consensus Estimate is pegged at $5.14.

Full-year 2025 organic sales growth is expected to be in the range of 7.5% to 8.5%. The Zacks Consensus Estimate for sales is currently pegged at $44.94 billion, suggesting a 7.0% improvement from the 2024 level.

For the first quarter of 2025, adjusted diluted EPS is expected to be between $1.05 and $1.09. The Zacks Consensus Estimate is pegged at $1.12.

Our Take

Abbott exited the fourth quarter of 2024 with its earnings meeting estimates but revenues missing the same. However, the figures improved on a year-over-year basis. 

All other business segments experienced growth during the reported quarter, except the Diagnostics segment. Meanwhile, Abbott’s Diagnostics sales growth continued to be adversely impacted by year-over-year declines in COVID-19 testing-related sales. 

During 2024, Abbott announced more than 15 new growth opportunities from the company's highly productive R&D pipeline. These include a combination of new product approvals and new treatment indications. 

Meanwhile, the contraction of both margins is worrisome. 

ABT’s Zacks Rank and Other Key Picks

Abbott currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks from the broader medical space are Veracyte VCYT, Cardinal Health CAH and Haemonetics HAE.

Veracyte, carrying a Zacks Rank #1 (Strong Buy) at present, reported a third-quarter 2024 adjusted EPS of 19 cents, which surpassed the Zacks Consensus Estimate by a huge 850%. Revenues of $115.9 million topped the Zacks Consensus Estimate by 5.8%. You can see the complete list of today’s Zacks #1 Rank stocks here.

VCYT has an estimated earnings growth rate of 137.2% for 2024 compared with the industry’s 15%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 520.58%.

Cardinal Health, carrying a Zacks Rank #2 at present, posted first-quarter fiscal 2025 adjusted EPS of $1.88, which exceeded the Zacks Consensus Estimate by 9.8%. Revenues of $52.28 billion surpassed the Zacks Consensus Estimate by 2%. CAH has an estimated long-term earnings growth rate of 10.5% compared with the industry’s 9.6%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 11.24%.

Haemonetics, carrying a Zacks Rank #2 at present, reported a second-quarter fiscal 2025 adjusted EPS of $1.12, which surpassed the Zacks Consensus Estimate by 2.8%. Revenues of $345.5 million topped the Zacks Consensus Estimate by 0.7%. HAE has an estimated earnings growth rate of 15.9% for fiscal 2025 compared with the industry’s 12.2%. The company’s earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 2.82%.

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