Please ensure Javascript is enabled for purposes of website accessibility

Abbott Laboratories Beats on Q2 Estimates, But Stock Slides

By Eric Volkman – Jul 16, 2020 at 6:24PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company's COVID-19 diagnostics solutions sold briskly during the quarter.

Although it's popular as a coronavirus stock these days, Abbot Laboratories (ABT 0.29%) nevertheless is struggling with other areas of its business. This was revealed in the company's second quarter of fiscal 2020 results, which it published Thursday morning.

The quarter saw the healthcare mainstay's total sales fall by 8% on a year-over-year basis to $7.33 billion. Non-GAAP (adjusted) net earnings declined at a 47% clip, meanwhile, to $537 million, or $0.57 per share.

Two healthcare professionals conferring in a hospital lobby.

Image source: Getty Images.

Analysts tracking the stock were expecting worse. On average, they believed Abbott would take in $6.81 billion in sales and post an adjusted net profit of $0.42 per share.

Two of the company's four business lines -- its largest, medical devices, and established pharmaceuticals -- saw notably lower sales during the quarter, falling a respective 21% and nearly 9%. Nutrition was stagnant. Diagnostics, however, was a standout with growth of just under 5%.

The reason for this is the company's COVID-19 testing solutions, which are offered on five diagnostic platforms. All told, Abbott drew $615 million in sales from such offerings.

The company expects demand for COVID-19 diagnostics to remain robust and positively impact the bottom line; after all, the virus continues to spread throughout the U.S., if not necessarily abroad. Abbott proffered adjusted per-share earnings guidance of at least $3.25 for this year, well above the average analyst projection of $2.90.

A Dividend Aristocrat, Abbott also declared its upcoming quarterly distribution. Like the two trailing payments, this will be $0.36 per share, payable on Aug. 17 to investors of record as of July 15. It yields 1.5%.

Despite the sales and earnings beats, Abbott's shares dipped by 0.3% on Thursday. This was essentially in step with the declines of the leading equity indexes.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Abbott Laboratories Stock Quote
Abbott Laboratories
ABT
$103.38 (0.29%) $0.30

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
342%
 
S&P 500 Returns
110%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/06/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.