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Shares of Abbott jumped 2% in premarket trading after the company released earnings.
An improvement in staffing levels at hospitals across the United States, along with the easing of pandemic restrictions worldwide were expected to aid in recovery of elective procedures, and in turn, help Abbott and other medical device makers generate strong sales this quarter.
The upbeat sales of Abbott’s medical devices mirror a trend seen by rival Johnson & Johnson (NYSE:JNJ), which also posted better-than-expected sales for the business on Tuesday.
Sales of medical devices – Abbott’s largest segment – grew 8.5% to $3.90 billion, of which $1.2 billion worth revenue was clocked in by glucose monitoring device Freestyle Libre. Analysts had estimated the unit’s sales to touch $3.77 billion in the reported period.
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 U.S. government will end the COVID Public Health Emergency on May 11, which in turn is expected to drag sales of COVID test kits as people on Medicare or private insurance will face out-of-pocket costs for both laboratory and at-home over-the-counter tests.
Abbott, which witnessed first-quarter sales worth $730 million in global COVID-19 test kits, slashed its annual revenue forecast for these devices to $1.5 billion from $2 billion.
