The stock of Abbott Laboratories (ABT -0.73%) was hammered like many stocks were when the COVID-19 crisis hit. But Abbott has weathered the storm much better than most. In fact, its shares are now up year to date, boosted largely by the company's launch of a super-fast diagnostic test for COVID-19.
Investors received even more good news from Abbott when it announced its 2020 first-quarter results before the market opened on Thursday. Here are the highlights from Abbott's Q1 update.
By the numbers
Abbott announced Q1 revenue of $7.7 billion, a 2.5% increase from the $7.5 billion reported in the same quarter of the previous year. The company's reported revenue was higher than the average analyst estimate of $7.34 billion.
The healthcare giant reported net income in the first quarter of $564 million, or $0.30 per share, based on generally accepted accounting principles (GAAP). This reflected a decline from GAAP net income of $672 million, or $0.38 per share, in the prior-year period.
Abbott posted adjusted net income of $0.65 per share, up from $0.63 per share in the same period in 2019. This result handily beat the average analyst estimate of $0.58 per share.
Behind the numbers
Currency fluctuations were a significant headwind for Abbott in the first quarter. The company's organic growth rate in Q1 was 4.3%, well above its reported year-over-year revenue growth of 2.5%.
Abbott's established pharmaceuticals unit generated the strongest organic growth. Sales for the segment increased by 9.3% year over year to $1.04 billion. All of the company's established pharmaceuticals revenue is generated in international markets.
In terms of reported growth, though, Abbott's nutrition segment took the prize. The company announced nutrition revenue of $1.9 billion, up 6.3% year over year on a reported basis and a 7.3% year-over-year organic increase.
Medical devices revenue rose 2.9% over the prior-year period to $2.94 billion. A strong performance in international markets more than offset a 3.3% decline in U.S. medical device sales.
The laggard for Abbott in the first quarter was its diagnostics segment with $1.83 billion in revenue, a 0.8% year-over-year decline. But U.S. sales grew briskly, jumping 10.9%.
Abbott suspended its previously announced guidance for full-year 2020. The company stated that this decision was made "due to uncertainties regarding the duration and impact of the coronavirus (COVID-19) pandemic."
But Abbott should continue to fare better than many companies will during the COVID-19 crisis. It boasts an exceptionally strong financial position with around $3.7 billion in cash, cash equivalents, and short-term investments. It also has revolving credit facilities that could enable tapping additional cash of up to $5 billion.
Several of Abbott's products are also crucial in the fight against COVID-19. In addition to its tests to diagnose the disease, Abbott just announced that it's launching a coronavirus antibody test that could determine if a person has recovered from COVID-19.