NEW YORK – Abbott Laboratories said Thursday that its first quarter Diagnostics business revenues declined slightly year over year.
For the three months ended March 31, Abbott reported overall Q1 revenues of $7.73 billion, up 3 percent from $7.53 billion in Q1 of 2019 and beating analysts' average estimate of $7.34 billion.
On an organic basis, revenues grew 4 percent year over year.
The firm reported its Diagnostics segment revenues decreased 1 percent year over year to $1.83 billion. Within Diagnostics, core laboratory revenues were $989 million, down about 7 percent year over year from $1.06 billion. Meanwhile, its molecular diagnostics revenues grew 29 percent to $139 million from $108 million in Q1 2019. Point-of-care revenues were up nearly 2 percent to $138 million from $135 million, and rapid diagnostic revenues increased 4 percent to $560 million from $537 million.
Company highlights for Q1 included the launch of three diagnostic tests for SARS-CoV-2. Abbott's PCR-based RealTime SARS-CoV-2 test and its point-of-care ID Now COVID-19 test both received Emergency Use Authorization from the US Food and Drug Administration in March. The company also recently announced a serology blood test for the detection of IgG antibodies on its immunoassay platforms.
In a conference call to discuss the financial results, President and CEO Robert Ford said the company intends to ship 4 million serology tests in April and ramp up capacity to 20 million tests per month in June and beyond. Ford added that Abbott shipped out 1 million M2000 PCR tests in March and is on target to manufacture 4 million PCR tests in April. Abbott also plans to ship 2 million ID Now tests by June.
Ford said Abbott is actively working with government authorities and health systems to deploy its tests to the places of greatest need.
Because EUA for Abbott's tests came late in the first quarter, Ford said there weren't a lot of SARS-CoV-2 sales during the quarter and he expected more significant sales in Q2.
Ford also noted the company was developing a fourth test for SARS-CoV-2, a lateral flow serology test to detect IgM antibodies that would launch in the "near future."
Decreases in elective procedures and routine testing at hospitals due to the pandemic also impacted Abbott's test volumes and will likely continue to impact them throughout the second quarter. Ford said he expected the second quarter to be the toughest in 2020, especially in the company's core lab business.
Abbott also received 510(k) clearances from the FDA for its i-Stat Chem8+ cartridge for the measurement of glucose and creatinine in point-of-care or clinical laboratory settings in February.
In other business segments, Abbott's Q1 Nutrition revenues grew 6 percent to $1.9 billion from $1.79 billion; Established Pharmaceuticals revenues increased 5 percent to $1 billion from $992 billion; and Medical Devices revenues were flat at to $2.9 billion.
Abbott reported net earnings of $564 million, or $.31 per share, in Q1 compared to $672 million, or $.38 per share, in the year-ago period. Adjusted EPS were $.65, beating analysts' consensus estimate of $0.58.
The firm spent $578 million on R&D in Q1, down 14 percent from $672 million in Q1 2019, and logged $2.55 billion in SG&A expenses, up about 3 percent from $2.48 billion in the prior-year quarter.
Cash and cash equivalents totaled approximately $3.7 billion.
CFO Robert Funck said on the conference call that exchange rates had an unfavorable year-over-year impact of almost 2 percent on Abbott's sales. Because the US dollar strengthened, there was a larger unfavorable impact on sales compared to expectations released in January, Funck said.
Like many other publicly traded firms, Abbott has suspended its previously announced guidance for 2020 due to uncertainty surrounding the SARS-CoV-2 pandemic. On the earnings call, Ford said the company might be in a position to give more qualitative updates on expectations in the second quarter and could issue some guidance in the second half of the year.
The firm said, however, that it would pay a cash dividend of $.36 per share on May 15 to shareholders of record at the close of business April 15.
In Thursday morning premarket trading on the New York Stock Exchange, shares of Abbott were up slightly at $91.19.