© Reuters. FILE PHOTO: Abbott Laboratories logo is displayed on a screen at the New York Stock Exchange (NYSE) in New York City, U.S., October 18, 2021. REUTERS/Brendan McDermid
By Leroy Leo and Khushi Mandowara
(Reuters) -Abbott Laboratories said on Wednesday delayed non-urgent surgeries had resumed globally three years into the COVID-19 pandemic as hospital staff shortages eased and customers became regular with health check-ups, sending its shares up 5%.
The much-awaited recovery in elective surgeries led the company to effectively raise forecast for its core business, even as COVID testing-related sales were seen falling sharply.
Abbott is the second major company to signal a recovery in medical device sales. Rival Johnson & Johnson (NYSE:JNJ) on Tuesday posted better-than-expected sales for the business.
Medical devices – Abbott’s largest segment – clocked an 8.5% rise in sales to $3.90 billion, with $1.2 billion coming from glucose monitoring device Freestyle Libre. Analysts had estimated sales of $3.77 billion for the unit.
“I think it is sustainable. I don’t think it’s a bolus of backlog,” Abbott CEO Robert Ford said about the recovery in medical device 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.
Abbott lowered its outlook for COVID testing sales this year to $1.5 billion from the $2 billion it forecast in January.
Excluding one-off items, Abbott reported a profit of $1.03 per share for the first quarter ended March 31, higher than analysts’ average estimate of 99 cents, according to Refinitiv IBES data.
The company retained its annual adjusted profit forecast at $4.30-$4.50 per share.