Stay-at-home orders prompted consumers to stock up on nutrition products and customers in emerging markets were strong buyers of pharmaceuticals, helping Abbott Laboratories (ABT 3.05%) beat expectations for first-quarter results. Analyst estimates had been lowered drastically since the breakout of the COVID-19 pandemic in anticipation of a slowdown in routine medical procedures.
Sales increased 4.3% on an organic basis to $7.7 billion and adjusted earnings per share rose 3.2% to $0.65. Abbott had originally guided to EPS between $0.69 and $0.71 for the quarter, but analysts lowered estimates in the last month to $0.58 on expectations of significantly lower sales of medical devices and diagnostics as hospitals canceled routine procedures.
Medical device sales still managed 2.9% organic growth year over year, and the diagnostics segment eked out a sales gain of 0.7%. Sales of nutrition products rose 7.3%, driven by buying of pediatric nutrition products in the U.S. in advance of shelter-in-place restrictions. Established pharmaceuticals sales rose 9.3% organically.
Abbott withdrew guidance for the full year, which previously called for organic sales growth between 7% and 8%. But its diagnostic segment should get a boost from three new COVID-19 tests that the company has recently launched. One molecular test runs on Abbott's devices in hospitals and reference laboratories, while the other new molecular test produces results in as little as five minutes, and CVS Health is setting up drive-up stations in its parking lots to utilize the innovative system. The third test is an antibody test Abbott announced yesterday that will detect if a person has previously been infected with the SARS-CoV-2 virus. The company expects to ship 4 million antibody tests in April, ramping up to 20 million in June.