Key Metrics
- Total Revenue: $10,635 million (4.9% yoy)
- Nutrition Revenue: $2,066 million (-0.3% yoy)
- Diagnostics Revenue: $2,412 million (-1.5% yoy)
- Established Pharmaceuticals Revenue: $1,406 million (2.7% yoy)
- Medical Devices Revenue: $4,747 million (11.7% yoy)
- Organic Growth: 7.4%
- Nutrition Growth: 2.8%
- Diagnostics Growth: 1.4%
- Established Pharmaceuticals Growth: 7.0%
- Medical Devices Growth: 13.3%
- Adjusted Gross Margin: 51.4% (compared to 49.7% Q3 2023)
- SG&A Expenses: Increased by $172 million, or 6.3%
- R&D Expenses: $713 million (increased by $41 million, or 6.1%)
Forward guidance
- Q4 Adjusted EPS Guidance: $1.31 to $1.37.
- Q4 Revenue Growth Projection: 9.5% to 10%.
- Gross Margin Improvement: Expected to improve by 75 basis points for the full year compared to last year.
- Libre Sales Target: Projected to exceed $6 billion with 20% growth this year.
- 2025 Revenue Growth Outlook: High single-digit growth anticipated.
- 2025 EPS Growth Outlook: 10% growth expected.
- Biosimilars Launch Timeline: First biosimilar on track for launch in emerging markets in late 2025.
Key takeaways
- Positives:
- Robert Ford stated, "We continue to expand our portfolio to meet the growing global demand for products that offer a combination of high protein, low sugar," indicating a strong focus on consumer health trends in Nutrition, particularly with double-digit growth in U.S. Pediatric Nutrition.
- The Diagnostics segment saw a 4.5% increase in sales, driven by "global demand for routine diagnostic testing and continued adoption of our market-leading diagnostic systems," suggesting robust market positioning and demand.
- Abbott's Med Tech portfolio grew over 13%, with continuous glucose monitors exceeding $1.6 billion in sales, reflecting strong market acceptance and innovation, as noted by Ford: "We feel good about our position and the strategy that we've built."
- The company is well-positioned for future growth, with Ford expressing confidence in achieving "double-digit growth back to the growth model that we had during pre-COVID."
- Negatives:
- Ford acknowledged challenges in the Nutrition segment, particularly in international pediatric markets, attributing share loss to "our commercial execution or lack thereof," which necessitated personnel changes and adjustments in demand generation.
- The Core Laboratory Diagnostics business faced headwinds due to the "VBP implementation in China," which Ford indicated would impact pricing and growth, highlighting regulatory challenges.
- Despite strong overall performance, there were concerns about the structural heart market, with Ford stating, "I'm not hearing that the centers... capacity is a big rate-limiting factor today," suggesting potential future constraints as demand grows.
- The company is navigating ongoing litigation related to infant formula, with Ford emphasizing the need for regulatory processes to be respected, indicating potential long-term legal and reputational risks.
Peer Summary
- Pharmaceuticals Sector: Johnson & Johnson anticipates a 5.7% to 6.2% operational sales growth for 2024, indicating a stable growth outlook compared to Abbott's mixed performance in established pharmaceuticals. J&J's Innovative Medicine segment reported double-digit growth, contrasting Abbott's challenges in international pediatric nutrition.
- Diagnostics Segment: Danaher Corp expects a low single-digit core revenue decline for 2024, while Abbott's diagnostics revenue fell 1.5% year-over-year. Danaher noted strong performance in clinical diagnostics, suggesting competitive pressures in this space.
- Medical Devices: Becton Dickinson projects 8.8% to 9.3% currency-neutral growth, while Abbott's medical devices grew 11.7%. However, Stryker reported strong double-digit growth in MedSurg and Neurotechnology, indicating robust competition in the medical technology market.
- China Market: Both J&J and Danaher highlighted headwinds in China, with J&J facing volume-based procurement challenges and Danaher noting high single-digit declines in bioprocessing, reflecting a cautious outlook for Abbott in this region.
