Abbott Laboratories (ABT 0.49%) is a leader in coronavirus testing. Its laboratory tests and rapid tests have brought in billions of dollars in revenue. In the fourth quarter of last year, for example, Abbott generated $2.3 billion from its COVID-19 tests. And the company said demand remained strong at the start of this year as the omicron variant gained ground.
But coronavirus testing revenue isn't sure to gain every quarter and every year. It's tapered off in the past. And it's likely to decline again in the future as the number of coronavirus cases falls. But that doesn't change my view of Abbott as a great buy. The following two charts show this healthcare company has other elements set to drive revenue higher.
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Four businesses to generate revenue
First, it's important to keep in mind that Abbott has four businesses: Nutrition, diagnostics, established pharmaceuticals, and medical devices. Medical devices historically have generated a big share of revenue. But that business suffered during the worst of the pandemic as many surgeries were postponed.
Now, let's get to the first chart. It shows Abbott is the second-biggest company in the cardiologic medical technology market. It holds 17% of the market as of 2017. By 2024, it may lose a bit of market share. Abbott's share is set to fall to 15.4%. But Abbott will still remain in the No. 2 spot.
Today, Abbott generates billions of dollars in revenue in the cardiology market. This past year, its cardiology medical device segments delivered more than $9 billion in revenue. And the company continues to launch new products into this market. They will be the revenue drivers down the road.
The diabetes market
The second chart refers to the diabetes market. Abbott already is a significant player here. The company sells the FreeStyle Libre continuous glucose monitoring system -- a top seller in the field. In the most recent quarter, FreeStyle Libre sales jumped more than 35% to $1 billion. And diabetes care generated more than $4.3 billion for Abbott in the full year. The following chart shows that, today, about 537 million people worldwide are living with diabetes. That number is set to rise to 783 million by 2045. This trend means more and more patients may look to Abbott for help in managing their condition.
Together, these two charts show two significant revenue drivers for Abbott today and in the coming years. I don't expect coronavirus testing revenue to disappear. Companies, schools, and organizations worldwide may continue to recommend testing at certain points once the pandemic is over. But even if Abbott eventually sells far fewer tests than it does today, I'm not worried. Abbott's medical device business is likely to ensure enormous revenue over time.
