Abbott's medical device sales recovery aids quarterly profit beat

New Delhi: Abbott Laboratories reported quarterly profit above expectations on Wednesday, underpinned by sales of its diabetes care devices and an improved demand for other devices due to a resumption in non-urgent medical procedures.

Shares of Abbott jumped nearly 3 per cent to $107 in premarket trading. An improvement in staffing levels at hospitals across the United States, and the easing of pandemic restrictions fueled demand recovery for elective procedures, helping medical device makers generate strong sales this quarter.

Abbott's medical device sales recovery mirrored a trend seen by rival Johnson & Johnson, which posted better-than-expected sales on Tuesday.

Sales of medical devices - Abbott's largest segment - grew 8.5 per cent to $3.90 billion, of which $1.2 billion revenue was clocked in by glucose monitoring device Freestyle Libre. Analysts had estimated the unit's sales to touch $3.77 billion.

Excluding one-off items, the company reported a profit of $1.03 per share for the first quarter ended March 31, higher than analysts' average estimate of 99 cents per share, according to Refinitiv IBES data.

The healthcare giant retained its adjusted profit forecast for this year at $4.30-$4.50 per share, as it expects growth of its non-COVID-testing-related revenue to offset a decline in its test kit sales.

The stronger outlook for its non-COVID business was the main takeaway as investors had priced in a fall in COVID testing sales, J.P. Morgan analyst Robbie Marcus said in a note.

Despite an upbeat view for the rest of its businesses, Abbott lowered its outlook for COVID testing sales and now expects annual revenue of $1.5 billion, down from the $2 billion it forecast in January.

The U.S. government will end the COVID-19 Public Health Emergency on May 11, which is likely to further drag down sales of COVID test kits as people on Medicare or private insurance will face out-of-pocket costs.