It's been a banner year so far for Abbott Laboratories (ABT -0.32%). The healthcare giant's business continues to grow despite -- and in large part, because of -- the COVID-19 pandemic. Its shares have jumped more than 25%.

And the good times appear to keep rolling for Abbott. The company announced its third-quarter results before the market opened on Wednesday. There were plenty of things to like with Abbott's Q3 update.

Lab worker using a pipet.

Image source: Getty Images.

By the numbers

Abbott reported third-quarter revenue of $8.9 billion. This reflected a 9.6% increase from revenue of $8.1 billion generated in the prior-year period. It also easily topped the Wall Street consensus Q3 revenue estimate of $8.51 billion.

The company announced net income in the third quarter of $1.2 billion, or $0.69 per share, based on generally accepted accounting principles (GAAP). In the same period of 2019, Abbott recorded GAAP earnings of $960 million, or $0.53 per share.

Abbott's non-GAAP adjusted bottom line improved significantly as well. The company posted adjusted earnings of $0.98 per share, up from $0.84 per share in the prior-year period. This result also beat analysts' average adjusted earnings estimate of $0.90 per share.

Behind the numbers

It's not surprising that Abbott's diagnostics business was its top-performing segment in the third quarter. Worldwide diagnostics sales soared 38.2% year over year to $2.64 billion. This strong growth stemmed mainly from increased demand for Abbott's COVID-19 diagnostics tests.

The company's medical devices segment sales rose 3.4% year over year in Q3 to nearly $3.2 billion. This growth continued to be held back somewhat by the COVID-19 pandemic, although procedure volumes continued to recover from the second quarter. The best news came in diabetes care, with the FreeStyle Libre continuous glucose monitoring system primarily fueling 37.9% sales growth.

Abbott's nutrition sales increased by 2.6% in the third quarter to $1.9 billion. Higher demand for Ensure adult nutrition products served as a key driver for this growth. Abbott's Pedialyte and PediaSure pediatric nutrition products also delivered solid growth in Q3. However, the company continued to face headwinds in the Greater China region.

The worst performance in Q3 came from Abbott's established pharmaceuticals segment, with sales falling 9.3% year over year on a reported basis to nearly $1.1 billion. This drop wasn't as bad when adjusted for foreign exchange fluctuations, though: Established pharmaceuticals organic sales slipped only 3.3% from the prior-year period. Market softness resulting from the COVID-19 pandemic was behind the sales decline.

Looking ahead

Abbott expects full-year 2020 GAAP diluted earnings per share from continuing operations of at least $2.35, up from its previous guidance of $2. The company looks for full-year adjusted earnings per share of at least $3.55, well above the average analyst estimate of $3.32 and its previous outlook of $3.25.

CEO Robert Ford stated that Abbott's "new product pipeline continues to be highly productive, and we're well-positioned to finish the year with a lot of momentum." The company's COVID-19 diagnostics tests are key to this momentum. In particular, Abbott's inexpensive and fast BinaxNOW COVID-19 Antigen Card diagnostics test is reshaping the entire COVID-19 diagnostic testing market

Investors can also count on the dividends to keep flowing. Abbott is scheduled to pay its 387th consecutive quarterly dividend on Nov. 16, 2020. The company's status as a Dividend Aristocrat almost certainly won't be in jeopardy. Look for Abbott's 49th consecutive annual dividend increase in the near future.