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Abbott Reports 5 Percent Q3 Dx Growth on Strong Core Lab, PoC Sales

NEW YORK (GenomeWeb) – Abbott today said that its Diagnostics business grew sales 5 percent year over year in the third quarter, driven in part by strong growth in its core laboratory and point-of-care tests.

For the three months ended September 30, Abbott reported overall revenues of $6.83 billion, up 29 percent on a reported basis and up 6 percent on a comparable operational basis from $5.30 billion in Q3 2016. The company beat the consensus Wall Street estimate of $6.72 billion.

Abbott reported Diagnostics sales rose to $1.28 billion. Within Diagnostics, core laboratory Q3 sales grew 6 percent to $1.03 billion; molecular revenues rose 3 percent to $115 million; and point of care grew 6 percent to $131 million.

The firm said that growth in its core laboratory business was led by continued share gains globally. Internationally, the firm continued the early rollout of its recently launched Alinity systems for the core laboratory, including Alinity c for clinical chemistry; Alinity i for immunoassay diagnostics; and Alinity s for blood and plasma screening. Abbott noted that it expects to initiate the launch of its Alinity systems in the US in 2018.

The firm said that in its molecular diagnostics business, it saw "continued growth" in infectious disease testing, its main focus in the MDx market, but that was offset by a planned scale down in other testing areas.

The firm noted that its point-of-care diagnostics segment continues to build and expand its presence in targeted developed and emerging markets.

Abbott said that among recent business highlights, it completed the acquisition of Alere on Oct. 3.

Its CEO Miles White said on a conference call to review Q3 financial results, that he did not expect that the acquisition would be accretive to earnings in 2017. However, he noted that whether the Alere deal has a big impact on Abbott's revenues and earnings in 2018 or beyond, "either way, we're pretty happy to have that business."

He said that initial estimates for accretion have been impacted by several changes, including divestitures, which impacted the value of the Alere business after the deal had been proposed in February 2016.   

In 2016, Abbott offered to buy Alere for $5.8 billion, but sales and accounting issues at Alere delayed the deal from moving forward. In April 2017, the firms amended the terms of their acquisition agreement and dismissed lawsuits they had filed against each other. Under the amended terms, Abbott also said it would buy Alere for a new price of about $5.3 billion.

White further noted that with Alere, Abbott has positioned itself as "a leader in point-of-care testing worldwide."

In its other businesses, Nutrition sales rose less than 1 percent to $1.77 billion; Established Pharmaceuticals grew 16 percent to $1.17 billion; and Medical Devices soared 98 percent to $2.60 billion.

Abbott reported net earnings of $603 million, or $0.34 per share, in Q3 2017, compared to a loss of $329 million, or $0.22 per share, in the year-ago period. Excluding special items, adjusted EPS was $0.66 per share, beating analysts' consensus estimate of $0.65.

The firm spent $562 million on R&D in Q3 2017, up 59 percent from $352 million in Q3 2016, and logged $2.10 billion in SG&A expenses, up 29 percent from $1.63 billion in the prior-year quarter.

Abbott today also narrowed its full-year 2017 EPS guidance range from continuing operations to between $0.97 and $0.99 for the full year 2017.

The firm estimated that its adjusted earnings per share from continuing operations for full-year 2017 would now be between $2.48 to $2.50.

Abbott issued fourth-quarter 2017 guidance for diluted earnings per share from continuing operations of between $0.28 to $0.30. It said that excluding specified items, adjusted earnings per share from continuing operations would be from $0.72 to $0.74 for the fourth quarter.

The firm noted on the conference call that its guidance for 2017 does not include the impact of the acquisition of Alere.

In early morning trading on the New York Stock Exchange, shares of Abbott were up more than 1 percent to $55.93.