And so, while there are certainly other moving parts, that fourth quarter impact should give you a pretty good feel for the magnitude of headwind thats flowing into next year, particularly in the first two to third quarters of the year. It's just difficult to predict with perfect degree of precision, but they'll come back. And well continue to use our global network to be able to augment those efforts of share recapture. While cardiovascular procedure trends continued to improve, growth in the quarter was somewhat more modest than what we had anticipated back in April due to several factors, most notably healthcare staffing challenges, COVID surges and lockdowns in China that were implemented as part of their efforts to control the spread of the virus. And I think, they're going to benefit a lot from our user base that we have in those countries. Oh, great. Categories Earnings Call Transcripts, Health Care, Abbott (NYSE: ABT) Q3 2022 earnings call dated Oct. 19, 2022, Scott LeinenweberVice President of Investor Relations, Licensing, and Acquisition, Robert FordChairman and Chief Executive Officer, Bob FunckExecutive Vice President, Finance, and Chief Financial Officer, Larry BiegelsenWells Fargo Securities Analyst, Joshua JenningsCowen and Company Analyst, Travis SteedBank of America Merrill Lynch Analyst. Rapid tests were proven to be very important and highly practical tools. We've got leading positions in these very large high-growth markets. So we're going to work to get on to pharmacy contracts, PBM contracts, managed care contracts, etc. Unless otherwise noted, our commentary on sales growth refers to organic sales growth, which excludes the impact of foreign exchange. So, I think that our value proposition, consumer-friendly product with best-in-class accuracy feature set with no real gaps. *Average returns of all recommendations since inception. So, those are big moving parts. By creating a free account, you agree to our, 11 Ways to Prevent Debt from Ruining Your Retirement Goals, Bulls Vs Bears: Mullen Automotive Short Interest Grows, Palantir Falls Into The Hands Of Value Investors, These Are The Top 10 Holdings Of Jason Kritzer, Walgreens push into comprehensive care picks up momentum, World markets mixed ahead of US elections, inflation data, Wall Street climbs ahead of Election Day, inflation data, See How To Can Benefit From New Copper Discoveries, 20 Stocks Wall Street Analysts Love the Most, In 20 years, this little-known trader didnt have a single losing year, 7 Commodities ETFs to Help Build a Hedge Against Inflation. So, as I look to the second half of the year, I anticipate some of the macro challenges to continue in some cases to be tough. Yeah, were seeing input costs go up probably more on the commodity side, so impacting EPD, impacting Nutrition, less so in I would say, in Devices and Diagnostics. We'll provide our earnings guidance in January as we always do, and we'll contemplate currency rates at that time. Last quarter -- last year, it was the highest quarter we've ever had in terms of procedures, in terms of sales. On the FX side, I dont know, Bob, do you have a comment on there? In diabetes care, sales of FreeStyle Libre exceeded $1 billion in the quarter, and our user base expanded to approximately 4.5 million users globally. But obviously, this relates only to the U.S. Were actually going to be launching an AID system in Europe with our partners in Europe in Q4 with Libre 2. Sure. Turning to our outlook for the full year 2022. I expect to see an approval and an opportunity for us to launch into the TAVR market here in the U.S. And on MitraClip, this was a tough comp for us this quarter. And so, while there are certainly other moving parts, that fourth quarter impact should give you a pretty good feel for the magnitude of headwind that's flowing into next year, particularly in the first two to third quarters of the year. In diabetes care, sales of FreeStyle Libre exceeded $1 billion in the quarter, and our user base expanded to approximately 4.5 million users globally. That's helpful. And as you remember, in November, December, January, and February, there was a lot of challenge with travel. So Amulet and Navitor internationally, I know you mentioned Portico, but I'd say it's probably more Navitor in Europe that did very well for us, and it continues to do pretty well. One of the challenges we had in the beginning was just really to get the implanters trained, we needed proctors. And obviously, we continue to see that moving forward positively. Some of the categories have been more regional, and they tend to be a little bit lower. Your line is open. (Operator Instructions). And do you think the hospitals are well equipped to overcome those? We delivered a billion test last year and approximately 300 million in the fourth quarter alone, and continue to play a significant role in the world's response to the pandemic. Thank you. Yeah. About 10% of that is happening just in the fourth quarter alone. I think we made a lot of progress on our gross margins historically, whether it was in devices and in nutrition. But there are some of these costs that I mentioned that I don't anticipate having to fly in the amount formula that we flew in from overseas. Supply is back to normal. One of the challenges we had in the beginning was just really to get the implanters trained. We've made very good progress. As my follow-up question in nutrition, one of the things we talked with investors about is how do you think about the recovery in that segment and once your supply is back up? Economic, competitive, governmental, technological, and other factors that may affect Abbott's operations are discussed in Item 1A, Risk Factors, to our annual report on Form 10-K for the year ended December 31, 2021. So we're ensuring that we've got the right amount of inventory. EPD has performed well throughout the pandemic, fueled by strong execution and a steady flow of new product introductions in our core therapeutic areas. And our next question comes from Josh Jennings from Cowen. Thank you. Thanks for taking all the questions. So how do you want investors to start thinking about where your base operating margin is maybe potentially of COVID testing sales slowdown in the future? Libre's sales grew over 35%, which translates to year-over-year growth of $1 billion to a total of $3.7 billion in 2021. Our number one supply priority was to the WIC - Women, Infant and Children Federal Food Assistance Program, to ensure that underserved participants would have access to infant formula. Good morning, and thank you for joining us. That's helpful, and I did want to ask about the M&A environment too, since it hasn't come up yet on this call, and also kind of how it relates to your thinking of the device growth longer term, if you're still able to grow at the high-end of med tech, it's the fab five as you called, is enough to do that? Were looking at this over the long term, and making the investments to be able to sustain this kind of growth rate. I think you mentioned there, I mean, Q2 last year was a pretty significant revenue for a lot in medtech, so there is that comp aspect there. And there's pretty competitive clinical profile here for high risk surgery patients. We're familiarizing the physicians with the product. These non-GAAP financial measures are reconciled with the comparable GAAP financial measures in our earnings news release and regulatory filings from today, which are available on our website at abbott.com. I would now like to introduce Mr. Scott Leinenweber, Vice-President, Investor Relations, Licensing and Acquisitions. In that number we do not have any significant government contracts. Scott, maybe you can talk about kind of Amulet and what we're seeing there also. Turning to our outlook for the full year 2022. We are in regular discussions with governments around the world, including the U.S., for surveillance testing needs and to ensure capacity is available and ready, if we see another surge this winter. Good morning and thank you for standing by. This move strategically fortifies our leadership position in the second largest continuous glucose monitoring market in the world and further enhances our already strong strategic position as we work to bring the benefits of Libre to more and more people, including those with type 2 diabetes that are not reliant on insulin to manage their disease. That said, at a high level, based upon kind of where we're at today, a decent portion of the impact we're seeing this year will carry into next year. So we're really, really in the early innings stages here. It is probably a much larger TAM in terms of people, but the usage of the sensors is probably more intermittent than you would kind of get on a person, for example, diabetes today, where we're very clear whether you're a Type I on a pump or a Type I injector or Type II. Or if you need to augment device growth with M&A overtime. With that. And then currency, as you referenced, pretty dramatic strengthening here of the U.S. dollar. And then I think there's really three factors there. I think that it's not surprising from the perspective of this coming up, because we've been leading in the generation of data and evidence to support this proposal. I mean, we have it in devices, but the model, at least in the U.S., is very pharma-like and -- where patient out-of-pocket, coinsurance, co-pays, contracts, etc., they play a big role in understanding those, and the interdependencies of those are very important. So, we focused on that and. Theyjust revealed what they believe are thetenbest stocksfor investors to buy right now and Abbott Laboratorieswasn't one of them! And lastly, global supply-chain dynamics and staffing shortages continued to impact our healthcare markets, though were seeing steady signs of improvements. I think if you would look at the kind of back orders that we had, whether it was Libre 1, and some of the back orders we had in EP, wed be high single digits, but if you back out, these issues mid to high overall for the company. And then currency, as you referenced, pretty dramatic strengthening here of the U.S. dollar. Yeah. Adult nutrition delivered 9% growth for the quarter and double-digit growth for the year, led once again by Ensure, our market leading, complete and balanced nutrition brand, and Glucerna, our leading diabetes nutrition brand. So we're making the investments that we know we need to make. On your question on lingo, Vijay, we have factored in a launch into next year. Hey, Vijay. Abbott will live webcast its first-quarter earnings conference call through its Investor Relations website at www.abbottinvestor.com at 8:30 a.m. Central time today. So, if you look at the Nielsen data, you do see share recovery. We forecast total company organic sales growth, excluding the impact of COVID testing-related sales, to be in the mid to high single digits. Sure. Obviously, a lot of your questions, so that there is, I guess, some uncertainty in the environment, its pretty dynamic. It had to do on share repurchases, use of cash if you're not using it for M&A. Thanks, Scott. Note that Abbott has not provided the GAAP financial measure for organic sales growth on a forward-looking basis because the Company is unable to predict future changes in foreign exchange rates, which could impact reported sales growth. Is Abbott Laboratories Still a Good Dividend Stock to Buy? Call Participants Youre going to see that sales growth falling through it, and it is pretty healthy margins. And just wondering, you caught a couple of the headwinds that you saw in 2Q for hospitals and the challenges that they're facing to accelerate elective procedure volumes in the second half. Supporting Materials. Bob Funck -- Executive Vice President, Finance, and Chief Financial Officer. Abbott undertakes no obligation to release publicly any revisions to forward-looking statements as a result of subsequent events or developments, except as required by law. So there's a team that's specifically dedicated to working on accelerated that time frame also. An archived edition of the webcast will be available later that day. So, once that facility starts up and running, I dont anticipate to see those same kind of freight expenses from overseas shipments. It cannot be recorded or rebroadcast without Abbott's expressed written permission. Probably what's a little bit different for us, another fact to consider in our forecast is just COVID testing and and how is that going to play out throughout the rest of the year, given the magnitude of what the testing could look like between it completely going away or it staying or increasing at this level. Anything you can provide to help us narrow the range of outcomes would be great. Just talk a little bit about also. During the quarter, we saw the U.S. dollar continued to strengthen versus several currencies, which resulted in a slightly more unfavorable impact on sales compared to exchange rates at the time of our earnings call in July. Abbott undertakes no obligation to release publicly any revisions to forward-looking statements as a result of subsequent events or developments, except as required by law. Invest better with The Motley Fool. I mean, that is another area that we're working on and focused on and probably ask Bob to give you some color on that. Adjusted R&D investment was 6.1% of sales, and adjusted SG&A investment was 25.9% of sales in the third quarter. Earnings Guidance. Robert, that was super helpful. Were going to look at areas that have a higher hurdle now for passing an investment hypothesis or thesis and were going to well take action where we need to take action. So, were very close there. So we've obviously seen our data that we've submitted to the agency, we've obviously seen now data from a competitive system, and I'd say we're feeling pretty good about where we stand, so. Our number one supply priority was to the WIC Women, Infant and Children Federal Food Assistance Program, to ensure that underserved participants would have access to infant formula. So did that cover all for you, Larry? That's our expectation. I think if you do a lit search on all the studies that have been done on CGM, and then segment them between pumps studies and basal studies and type 2 studies and type 2 with non-insulin studies, you're going to see that Libre is at the head of all of those type 2 studies. Thank you. Strength of our COVID testing business, that's provided us an awful lot of flexibility to reinvest back into our P&L over the last couple of years. Good morning, thanks for taking the question. Abbott Laboratories (ABT) Q1 2021 Earnings Call Transcript By Motley Fool Transcribers - Apr 20, 2021 at 2:30PM You're reading a free article with opinions that may differ from The Motley. We're in great markets, leading positions in several large, fast-growing segments diabetes devices, diagnostics, including COVID testing, nutrition, emerging market pharma. From a pricing standpoint, we have the flexibility to just price a bit in some areas of the business, and we're doing so. So, as weve added accounts over the first portion of this year, well look to do the same thing with them as we go forward, so great opportunity to build, seen nice growth there, and like I said, like Robert said, kind of a handful of the other items along with TriClip, Navitor and Amulet here that are driving growth in addition to what youre seeing, and know it is the long-term opportunity for MitraClip. One moment for our next question. You mentioned a lot of like onetime costs in Nutrition with contracts on top of inflation and FX. So, I think thats going to be an important growth driver for us towards the end of the year and as we go into 2023. So, I put all that together, Robbie, weve got macro headwinds that everybody else has. Q2 2022 20 Jul 2022: Q2 2022 Earnings Call Transcript: Q1 2022 20 Apr 2022: Q1 2022 Earnings Call Transcript: 2021. Thanks. Image source: The Motley Fool. Lastly our third quarter adjusted tax rate was 18.1%, which reflects an adjustment to align our year-to-date tax rate with our revised full-year effective tax rate forecast of 15.5%. So we'll look at managing the P&L and our investments in our structures and choosing areas where we're going to continue to invest, and then other areas we'll see some of the leverage from the investments that we've made in the past. Thanks. Just wanted to ask a couple more on the margin puts and takes. And thats the other piece of the business, so high single digit growth excluding COVID. The pandemic, they did pretty well in Q4. But the other part of the Nutrition is, I would say, cost that I don't anticipate to be there next year. I think those get better. And how steady can the Device business be going forward? Acknowledge that there's a lot of uncertainties in the macro environment right now and the challenges that creates in terms of, you know, in terms of forecasting for investors, at least in the short term, the pandemic, how long will it last, phases, transition to endemic, recovery curves of procedures. So, yeah, our target is to be able to launch that by the end of the year in Europe. So the market still remains pretty underpenetrated, and there's a lot of opportunity for growth there. Let me take the CMS one. The, what I would call, healthcare staffing challenges, COVID cancellations, the lockdown issues that we saw in Q2, especially, I'd say, on our Core Lab business and EP in China, for example, those are being absorbed also. So I didn't necessarily see the impact of omicron to those businesses, like we didn't see it in delta either. I think looking at the market between government contracts and non-government contract is something that we spend a lot of time this year doing, because obviously those government contracts they are high-volume, and they ultimately skew a little bit of kind of the run-rate as were trying to kind of run-rate this, so if you look at our Q4 number, our Q4 number that were forecasting is really what I would call an endemic state, right? And if you look at what we did in December, that would put us at about a 10% market share, which is I think is pretty good. We actually gone through some of it in Pharmaceuticals also. So I think that speaks well about still the need for the products and the technologies and the innovation. So, I think that were going to need to see how the cases evolve, Robbie, especially during the winter and fall months over here. So is that how we should view your base business earnings power or are you still spending more through the year from some of the COVID testing profits or being conservative? So, like I said, weve intentionally made these decisions in terms of how were supplying the market, and I think by doing that just naturally with the work that our teams are doing, well start to see the share recovery build month-over month, so thats probably how to think about it. It is going to be a little bit of a headwind. As Scott mentioned earlier, please note that all references to sales growth rates unless otherwise noted are on an organic basis, which excludes the impact of foreign exchange. Is theres going to be another headwind next year, and any new VBPs that you see coming up in China? The areas that you referenced are areas that are in the list of things that we would be interested in looking at. So that also plays a role together with the inflation aspects that we're facing. So, the market still remains pretty underpenetrated and theres a lot of opportunity for growth there. And how steady can the device business be going forward? Your line is open. And we bought back shares in the first half of the year and something that well continue to assess as we go through the second half year. So. So, thats another opportunity also for to maybe to offset that. And as people tested positive, while they didnt have to go to the hospital and they could just stay at home, that had an impact in some of the procedures that theres a little bit more planning towards. The headline organic Ex-COVID in 3Q was three percentage low singles. Our back-of-the-envelope math suggests that could be $1 billion opportunity for Abbott in five years. Robert, can you talk about how you thought about the 2022 guidance? 2022 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. But I think the focus for investors is quickly shifting to next year, and there's a lot of moving pieces going on in 2022, a lot of assumptions we have to make in the go forward of 2023. Thank you. The Cardiovascular portfolio, Device portfolio, there is growth. How's inflation, FX hitting throughout? The average estimate of three analysts surveyed by Zacks Investment Research was for earnings of . As a reminder, once we begin production, it takes several weeks for product to reach store shelves. Robert and Bob will provide opening remarks. I think the dataset is pretty small right now. We had a growth of about 6% that was impacted a little bit in the U.S. but we had almost double-digit growth internationally. Should we expect it to be kind of a gradual rollout like we saw with Libre 2? So, weve made the study, feel good about the results, and Ill be updating once we have something to update there. On inflation, definitely were seeing the impacts there. 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