By Christy Santhosh and Kamal Choudhury (Reuters) -Abbott missed analysts’ third-quarter revenue estimates on Wednesday, as weakness in its diagnostics and nutrition businesses outweighed robust demand for its medical devices. The company had flagged volatility in the businesses as it navigates a sharp decline in COVID-19 testing demand, new U.S. tariffs, and a freeze on […]
Health
Abbott revenue misses as diagnostics, nutrition weakness clouds medical devices lift
Audio By Carbonatix
By Christy Santhosh and Kamal Choudhury
(Reuters) -Abbott missed analysts’ third-quarter revenue estimates on Wednesday, as weakness in its diagnostics and nutrition businesses outweighed robust demand for its medical devices.
The company had flagged volatility in the businesses as it navigates a sharp decline in COVID-19 testing demand, new U.S. tariffs, and a freeze on foreign aid by President Donald Trump’s administration.
The diagnostics division is also facing pricing pressure from China’s procurement program that buys medical devices in bulk at steep discounts.
“Our growth rate in China is around 5% to 7% if you take out the diagnostic piece and I think that’s probably not a bad place to be in,” CEO Robert Ford told analysts during a conference call.
RBC Capital Markets analysts said Abbott’s quarterly results were “mixed, but in line with the company’s prior communication”, calling the current headwinds “transitory”.
Total revenue of $11.37 billion for the quarter ended September 30 slightly missed analysts’ average estimate of $11.40 billion, according to data compiled by LSEG.
Abbott shares slipped 2% in early trade. They are up 17% this year, as of last close.
The company’s medical devices segment, which sells heart devices and continuous glucose monitors, trumped estimates but the nutrition business fell short due to weakness in its pediatric division that sells baby formulas.
The pediatric nutrition business has been under the scanner over lawsuits alleging its specialized formula for premature infants caused babies to develop a dangerous bowel disease called necrotizing enterocolitis.
Ford declined to comment on the litigation and attributed the weakness in its nutrition business to the loss of market share to competition.
Abbott, which reiterated a hit of under $200 million from the current tariffs this year, said it would not expect a meaningful impact from the sweeping Section 232 probes into medical device imports launched by the Trump administration.
On an adjusted basis, Abbott reported third-quarter profit per share of $1.30, in line with analysts’ average estimate.
The company said it now expects annual adjusted profit to be between $5.12 and $5.18 per share, compared with its previous range of $5.10 to $5.20.
(Reporting by Kamal Choudhury and Christy Santhosh in Bengaluru; Editing by Sriraj Kalluvila)