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(Reuters) -Abbott Laboratories on Wednesday reported lower-than-expected medical device sales in the fourth quarter as COVID-19 curbs in China and supply-chain issues hit its international operations, dragging shares 2.5% lower in premarket trading.
The multinational healthcare giant recorded an overall medical device sales of $3.75 billion, missing analysts’ average estimate of $3.84 billion.
The miss in the segment was driven by lower demand for certain cardiac equipment, J.P. Morgan analyst Robbie Marcus said in a note.
China had been enforcing zero-COVID curbs for about three years, but scrapped the policy last month, which set off a massive wave of infections.
The company, however, posted a better-than-expected quarterly profit, underpinned by strong demand for its diagnostics business and glucose monitoring device FreeStyle Libre.
Freestyle Libre has been driving the sales of Abbott’s medical devices, offsetting a decline in COVID-19 diagnostic test sales as infections wane.
The company recorded $1.1 billion each in sales of FreeStyle Libre and COVID-testing related sales. It expects testing-related sales of around $2 billion this year.
The company reported an 11% drop in overall nutrition sales for the quarter, with the U.S. pediatric nutrition revenue dropping by about a fifth due to disruptions at its baby formula facility in the first half of 2022.
The Michigan plant, which was at the center of the baby formula shortage last year, faces a criminal investigation by the U.S. Justice Department. The facility was reopened after the regulator and the company reached an agreement.
Excluding one-off items, Abbott reported a profit of $1.03 per share for the fourth quarter ended Dec. 31, higher than analysts’ average estimate of 92 cents.
The company also forecast adjusted profit of $4.30 to $4.50 per share for 2023, with the mid-point marginally lower than analysts’ average estimate of $4.41.
