Though many stocks entered a bear market in March, shares of Abbott Laboratories (NYSE:ABT) gained 2.44% in the month, according to data provided by S&P Global Market Intelligence. The stock climbed as Abbott announced the clearance of its coronavirus test.
The coronavirus outbreak has now reached 900,300 cases worldwide, and countries are facing shortages of tests and related equipment. In March, the U.S. Food and Drug Administration granted Abbott emergency-use authorization for its molecular point-of-care test. As the fastest test currently available, it can deliver positive results in as few as 5 minutes and negative results in 13 minutes. The test operates on Abbott's ID NOW platform, a device about the size of a toaster that can be used in a variety of locations from hospitals to doctors' offices.
The ID NOW platform is already widely used throughout the U.S., making it likely that facilities with the platform will order the coronavirus tests. Abbott said it was boosting production to deliver 50,000 COVID-19 tests per day to sites in the U.S. In March, the company also announced the emergency-use authorization for its COVID-19 molecular test to be used in laboratories. Since a key part of controlling the pandemic is through testing, Abbott is set to play an important role in the coming weeks.
That said, the coronavirus test is a very small part of this massive company, with expertise in areas including glucose monitoring, adult and pediatric nutrition, and remote heart failure monitoring. For example, in the fourth quarter, diagnostics totaled $2 billion in sales, while medical devices generated $3.2 billion. While diagnostics sales rose 6.4% year over year, medical device sales gained even more, growing 11.3%. Sales of the COVID-19 tests surely will add to Abbott's sales, but over time, the company's portfolio as a whole is what will drive gains.
Though the shares resisted last month's market decline, April's performance might depend on what Abbott says -- especially about any impact from the coronavirus outbreak on business -- during its first-quarter earnings report on April 16.