NEW YORK (GenomeWeb) – Abbott reported today that third quarter sales in its Diagnostics business grew 5 percent year over year, driven by nearly 6 percent increases in both its point-of-care and core-lab diagnostics sales, but offset by a 1 percent decline in molecular diagnostics sales.
For the three months ended Sept. 30, Abbott reported overall Q3 revenues of $5.30 billion, up 3 percent from $5.15 billion in Q3 last year. The company beat the consensus Wall Street estimate of $5.29 billion.
Abbott reported Diagnostics sales of $1.21 billion for the quarter, up 5 percent year over year on a reported basis. Within Diagnostics, core laboratory Q3 sales grew nearly 6 percent to $977.0 million, molecular revenues slipped 1 percent to $112.0 million, and point of care grew almost 6 percent year over year to $124.0 million, on a reported basis.
Abbott noted that its molecular diagnostics sales were driven by continued strong growth in its infectious disease testing business, but were partly offset by the planned scale down of its genetics business.
On a conference call to review Q3 financial results, Abbott CEO Miles White said, "We achieved our financial expectations for the quarter. … We continue to advance our leadership and competitive position through several new product approvals and launches across our businesses, and we continue to take strategic steps to shape our portfolio, building leadership positions for long-term growth."
In other businesses, Nutrition sales dipped 2 percent (including an unfavorable 1 percent foreign exchange effect) to $1.76 billion, Established Pharmaceuticals grew 5 percent to $1.01 billion, and Medical Devices grew 6 percent to $1.31 billion in the third quarter.
Abbott reported a net loss of $329.0 million, or $0.22 per share, in Q3 compared to a profit of $580 million, or $0.38 per share, in the year-ago period. The net loss in the third quarter was partly due to an adjustment associated with Abbott's equity investment in Mylan that cut its earnings by $0.66 per share. Excluding special items, EPS was $0.59, which is at the high end of the company's previous guidance range and beat analysts' consensus estimate of $0.58.
The firm spent $352.0 million on R&D in Q3, down 7 percent from $378.0 million in Q3 2015, and logged $1.63 billion in SG&A expenses, down 2 percent from $1.67 billion.
Abbott adjusted its full-year 2016 EPS guidance for continuing operations under GAAP to a range between $0.59 and $0.61, and narrowed its full-year 2016 adjusted EPS guidance for continuing operations to a range of $2.19 to $2.21, exceeding its initial guidance for the year.
"The diagnostics business has been one of the consistent, reliable, star performers of the company," White said. "The core laboratory business has performed exceptionally well and continues to, as has the point-of-care business. We're going through the exit of an agreement in our molecular business. … In any case, I think all of those businesses are performing well commercially. What I am more impressed with, with this team than anything else is that over the last four to five years, they have had an unprecedented number of new diagnostics systems in R&D that are all beginning to launch now."
Abbott is also in the process of two major acquisitions. Early this year, the firm inked a $5.8 billion deal to acquire Alere in a move intended to strengthen its point-of-care and molecular diagnostics businesses. It also signed an agreement in April to acquire medical device maker St. Jude Medical for $25 billion.
In September, Abbott announced the sale of Abbott Medical Optics, its vision care business, to Johnson & Johnson for $4.325 billion, a transaction expected to close in Q1 2017.
Although the St. Jude acquisition appears to be on track to close around the end of this year, uncertainty still exists around completing the acquisition of Alere.
"Alere is not a sensitive subject," White said in response to an analyst's question. "At this point, we are pursuing all of the necessary regulatory approvals for the deal. … We're doing everything we're supposed to do per the contract." He added that he was not, at the same time, willing to forecast what would happen with the deal.
"I'm going to be very limited in the comments that I'm going to make about Alere," he said. "There has been a lot of noise and it's come from a lot of places – not us. … It isn't prudent for us to respond to noise."
He reiterated his faith in Alere's business, though. "Is the strategic fit there? Yes, it is," he said. "We like the products, we like the businesses, and I continue to say that. Is the long-term post-merger opportunity and fit there? Yes, it is."
In Wednesday morning trade on the New York Stock Exchange, shares of Abbott were down more than 2 percent at $40.27.