Abbott Laboratories (NYSE: ABT) reported mixed results for the final months of fiscal 2024 and issued guidance for the first quarter and fiscal 2025. The medical device company’s stock slipped in premarket trading on Wednesday, before picking momentum as the regular session started.
Abbott’s shares mostly traded sideways last year, and the trend extended into the early days of 2025. The stock has gained about 5% this month but stays close to where it was around three years ago. Currently trading slightly above its long-term average, ABT has the potential to deliver stable shareholder value going forward. The company’s fundamentals remain strong and it has a strong track record of paying dividends.
Fourth-quarter sales increased 7.2% year-over-year to $10.9 billion, with organic sales for the underlying base business growing 10.1%, but the top line missed Wall Street’s estimates. Adjusted earnings moved up to $1.34 per share in Q4 from $1.19 per share in the year-ago quarter and matched Wall Street’s expectations. Unadjusted profit rose sharply to $9.23 billion or $5.27 per share in the fourth quarter from $1.60 billion or $0.91 per share in Q4 2023, reflecting a significant tax benefit.
Sales Trend
The performance of Abbott’s diabetes care division remains impressive, with sales of continuous glucose monitors growing by more than a fifth in fiscal 2024. The company expects unfavorable exchange rates to impact sales performance in the coming quarters, partially offsetting the benefit of strong device sales that grew about 14% in the latest quarter and topped expectations.
From Abbott’s Q4 2024 earnings call:
“Abbott’s commitment to innovation, operational excellence, and serving the needs of our customers resulted in another year of exceptional performance, which included achieving sales growth of 9.5% excluded COVID testing, delivering 70 basis points of gross margin profile improvement, driving acceleration in the growth of our earnings per share throughout the year and developing and advancing new products through our rich pipeline. The strong performance resulted in generating $8.5 billion of operating cash flow…”
Guidance
For fiscal 2025, the management expects adjusted earnings per share to be between $5.05 and $5.25, which reflects double-digit growth at the midpoint. It sees a 7.5-8.5% annual growth in full-year organic sales. For the first quarter, earnings are expected to be in the range of $1.05 per share to $1.09 per share, excluding special items.
Abbott’s stock was trading up 2% on Wednesday afternoon, hovering near the $120 mark. It has gained about 17% in the past six months.