Financial Review - Results of Operations

Abbott's revenues are derived primarily from the sale of a broad line of health
care products under short-term receivable arrangements. Patent protection and
licenses, technological and performance features, and inclusion of Abbott's
products under a contract most impact which products are sold; price controls,
competition and rebates most impact the net selling prices of products; and
foreign currency translation impacts the measurement of net sales and costs.
Abbott's primary products are medical devices, diagnostic testing products,
nutritional products and branded generic pharmaceuticals.

The following tables detail sales by reportable segment for the three and nine
months ended September 30. Percent changes are versus the prior year and are
based on unrounded numbers.

                                                                                    Net Sales to External Customers
                                             Three Months          Three Months
                                                 Ended                 Ended                                      Impact of                 Total Change
                                             September 30,         September 30,            Total                  Foreign                 Excl. Foreign
(in millions)                                    2022                  2021                 Change                 Exchange                   Exchange

Established Pharmaceutical Products        $        1,326          $    1,265                    4.9  %                  (7.3) %                      12.2  %
Nutritional Products                                1,795               2,108                  (14.9)                    (4.6)                       (10.3)
Diagnostic Products                                 3,671               3,912                   (6.2)                    (5.6)                        (0.6)
Medical Devices                                     3,615               3,632                   (0.5)                    (6.9)                         6.4
Total Reportable Segments                          10,407              10,917                   (4.7)                    (6.0)                         1.3
Other                                                   3                  11                       n/m                      n/m                          n/m
Net Sales                                  $       10,410          $   10,928                   (4.7)                    (6.0)                         1.3

Total U.S.                                 $        4,094          $    4,368                   (6.3)                       -                         (6.3)

Total International                        $        6,316          $    6,560                   (3.7)                   (10.0)                         6.3



                                                                                    Net Sales to External Customers
                                                                    Nine Months
                                           Nine Months Ended           Ended                                     Impact of                 Total Change
                                             September 30,         September 30,            Total                 Foreign                 Excl. Foreign
(in millions)                                    2022                  2021                Change                 Exchange                   Exchange

Established Pharmaceutical Products        $        3,696          $    3,515                   5.2  %                  (6.4) %                      11.6  %
Nutritional Products                                5,642               6,252                  (9.8)                    (3.4)                        (6.4)
Diagnostic Products                                13,279              11,173                  18.9                     (4.2)                        23.1
Medical Devices                                    10,937              10,618                   3.0                     (5.4)                         8.4
Total Reportable Segments                          33,554              31,558                   6.3                     (4.7)                        11.0
Other                                                   8                  49                      n/m                      n/m                          n/m
Net Sales                                  $       33,562          $   31,607                   6.2                     (4.7)                        10.9

Total U.S.                                 $       13,923          $   11,787                  18.1                        -                         18.1

Total International                        $       19,639          $   19,820                  (0.9)                    (7.4)                         6.5



Notes:
In order to compute results excluding the impact of exchange rates, current year
U.S. dollar sales are multiplied or divided, as appropriate, by the current year
average foreign exchange rates and then those amounts are multiplied or divided,
as appropriate, by the prior year average foreign exchange rates.

n/m = Percent change is not meaningful


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The 1.3 percent increase in total net sales during the third quarter of 2022,
excluding the impact of foreign exchange, reflected growth in the Medical
Devices and Established Pharmaceutical Products segments partially offset by
lower Nutritional Products sales as well as a year-over-year decline in COVID-19
testing-related revenues. Abbott's COVID-19 testing-related sales totaled
approximately $1.7 billion during the third quarter of 2022 and approximately
$1.9 billion during the third quarter of 2021. Excluding the impact of COVID-19
testing-related sales, Abbott's total net sales decreased 3.1 percent. Excluding
the impacts of COVID-19 testing-related sales and foreign exchange, Abbott's
total net sales increased 3.2 percent. Abbott's net sales were unfavorably
impacted by changes in foreign exchange rates in the third quarter as the
relatively stronger U.S. dollar decreased total international sales by 10.0
percent and total sales by 6.0 percent.

The 10.9 percent increase in total net sales during the first nine months of
2022, excluding the impact of foreign exchange, reflected demand for Abbott's
rapid diagnostic tests to detect COVID-19 as well as growth in the Medical
Devices and Established Pharmaceutical Products segments partially offset by
lower Nutritional Products sales. Abbott's COVID-19 testing-related sales
totaled approximately $7.3 billion during the first nine months of 2022 and
approximately $5.4 billion during the first nine months of 2021. Excluding the
impact of COVID-19 testing-related sales, Abbott's total net sales increased 0.1
percent. Excluding the impacts of COVID-19 testing-related sales and foreign
exchange, Abbott's total net sales increased 4.9 percent. Abbott's net sales
were unfavorably impacted by changes in foreign exchange rates in the first nine
months as the relatively stronger U.S. dollar decreased total international
sales by 7.4 percent and total sales by 4.7 percent.

Due to the unpredictability of the duration and impact of the current COVID-19
pandemic, the future extent to which the COVID-19 pandemic will have a material
effect on Abbott's business, financial condition or results of operations is
uncertain.

The table below provides detail by sales category for the nine months ended
September 30. Percent changes are versus the prior year and are based on
unrounded numbers.

                                                                                                               Impact of                 Total Change
                                              Sept. 30,           Sept. 30,              Total                  Foreign                 Excl. Foreign
(in millions)                                   2022                2021                 Change                 Exchange                   Exchange
Established Pharmaceutical Products -
Key Emerging Markets                        $    2,826          $    2,672                    5.8  %                  (6.4) %                      12.2  %
Other Emerging Markets                             870                 843                    3.2                     (6.3)                         9.5

Nutritionals -
International Pediatric Nutritionals             1,491               1,637                   (8.9)                    (4.3)                        (4.6)
U.S. Pediatric Nutritionals                      1,108               1,622                  (31.7)                       -                        (31.7)
International Adult Nutritionals                 2,027               1,987                    2.0                     (7.0)                         9.0
U.S. Adult Nutritionals                          1,016               1,006                    1.0                        -                          1.0

Diagnostics -
Core Laboratory                                  3,624               3,780                   (4.1)                    (5.7)                         1.6
Molecular                                          815               1,082                  (24.7)                    (2.8)                       (21.9)
Point of Care                                      394                 401                   (1.6)                    (1.2)                        (0.4)
Rapid Diagnostics                                8,446               5,910                   42.9                     (3.8)                        46.7

Medical Devices -
Rhythm Management                                1,605               1,657                   (3.2)                    (4.5)                         1.3
Electrophysiology                                1,440               1,403                    2.6                     (5.6)                         8.2
Heart Failure                                      690                 650                    6.2                     (2.4)                         8.6
Vascular                                         1,878               1,976                   (5.0)                    (4.9)                        (0.1)
Structural Heart                                 1,271               1,191                    6.7                     (6.1)                        12.8
Neuromodulation                                    568                 584                   (2.7)                    (2.1)                        (0.6)
Diabetes Care                                    3,485               3,157                   10.4                     (7.0)                        17.4


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Excluding the unfavorable effect of foreign exchange, sales in the Key Emerging
Markets for Established Pharmaceutical Products increased 12.2 percent in the
first nine months of 2022, led by double-digit growth in several countries,
including India and China, and therapeutic areas, including gastroenterology,
central nervous system/pain management, and respiratory products. Other Emerging
Markets, excluding the effect of foreign exchange, increased by 9.5 percent in
the first nine months of 2022.

International Pediatric Nutritional sales, excluding the effect of foreign
exchange, decreased 4.6 percent in the first nine months of 2022 versus the
comparable 2021 period. The decrease reflects the impact of challenging market
dynamics in the infant category in Greater China partially offset by higher
sales volumes in various countries in Southeast Asia and Latin America.
International Adult Nutritional sales, excluding the effect of foreign exchange,
increased 9.0 percent, reflecting double digit growth of the Ensure® and
Glucerna® brands in several countries in Southeast Asia and China. In the first
nine months of 2022, U.S. Adult Nutritional sales increased 1.0 percent.

In U.S. Pediatric Nutritionals, Abbott initiated a voluntary recall in February
2022 of certain infant powder formula products manufactured at its facility in
Sturgis, Michigan and stopped production at the facility. On May 16, 2022,
Abbott entered into a consent decree with the U.S. Food and Drug Administration
(FDA) on the steps necessary to resume production and maintain the Sturgis
facility and operations. On July 1, Abbott restarted partial production at the
facility starting with its specialty formula EleCare® and metabolic formulas.
Subsequently, Abbott restarted Similac® production. The consent decree does not
affect any other Abbott plant or operation.

During the first three quarters of 2022, Abbott took various actions to mitigate
the impact of the recall on the supply of formula in the U.S. These actions
included the shipment of infant formula powder into the U.S. from Abbott's
FDA-registered facility in Ireland; prioritization of infant formula production
at its Columbus, Ohio facility; conversion of other liquid manufacturing lines
into manufacturing Similac liquid ready-to-feed product; increased production of
powder infant formula at its Casa Grande, Arizona manufacturing site; and
importation of product from its facility in Spain as permitted by the FDA.

The 31.7 percent decrease in U.S. Pediatric Nutritional sales in the first nine
months of 2022 reflects the impact of the recall and the Sturgis production
stoppage partially offset by increased demand for Abbott's Pedialyte® products.
U.S. sales of infant powder formula brands associated with the recall were $277
million and $900 million in the first nine months of 2022 and 2021,
respectively.

The 23.1 percent increase in Diagnostic Products sales in the first nine months
of 2022, excluding the impact of foreign exchange, was driven by demand for
Abbott's portfolio of COVID-19 tests in Rapid Diagnostics and growth in routine
diagnostic testing in Molecular Diagnostics. In Core Laboratory Diagnostics,
sales increased 1.6 percent in the first nine months of 2022, excluding the
effect of foreign exchange, due to the higher volume of routine diagnostic
testing from the continued roll-out of the Alinity® platform and an expanded
menu of tests. These increases were partially offset by lower sales of Abbott's
laboratory-based tests for the detection of COVID-19 IgG and IgM antibodies,
which determine if someone was previously infected with the COVID-19 virus, as
well as market disruptions in China due to COVID-19 quarantine restrictions in
various cities primarily during the second quarter of 2022. In the first nine
months of 2022 and 2021, Core Laboratory Diagnostics IgG and IgM antibody
testing-related sales on Abbott's ARCHITECT and Alinity i platforms were $51
million and $159 million, respectively. In the first nine months of 2022, Core
Laboratory Diagnostics sales decreased 1.3 percent, excluding COVID-19
testing-related sales, and increased 4.6 percent, excluding the impact of
foreign exchange and COVID-19 testing-related sales.

The 21.9 percent decrease in Molecular Diagnostics sales in the first nine
months of 2022, excluding the effect of foreign exchange, was driven by lower
demand for Abbott's laboratory-based molecular tests for COVID-19 partially
offset by growth in the base business from increased routine molecular testing.
In the first nine months of 2022 and 2021, Molecular Diagnostics COVID-19
testing-related sales were $375 million and $699 million, respectively. In the
first nine months of 2022, Molecular Diagnostics sales increased 14.9 percent,
excluding COVID-19 testing-related sales, and increased 19.4 percent, excluding
the impact of foreign exchange and COVID-19 testing-related sales.

In Rapid Diagnostics, sales increased 46.7 percent in the first nine months of
2022, excluding the effect of foreign exchange, due to the demand for Abbott's
COVID-19 tests on its rapid testing platforms, including the Panbio® system, the
ID NOW® platform, and the BinaxNOW® COVID-19 Ag Card test. In the first nine
months of 2022 and 2021, Rapid Diagnostics COVID-19 testing-related sales were
$6.9 billion and $4.5 billion, respectively. In the first nine months of 2022,
Rapid Diagnostics sales increased 11.8 percent, excluding COVID-19
testing-related sales, and increased 14.6 percent, excluding the impact of
foreign exchange and COVID-19 testing-related sales. These increases reflect
higher sales
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of ID NOW tests for flu, strep, and respiratory syncytial virus (RSV) as well as
growth in various other Rapid Diagnostics products.

Excluding the effect of foreign exchange, total Medical Devices sales grew 8.4
percent in the first nine months of 2022, driven by growth in Diabetes Care,
Electrophysiology, Structural Heart and Heart Failure. Growth in Diabetes Care
sales was driven by continued growth of FreeStyle Libre®, Abbott's continuous
glucose monitoring system, in the U.S. and internationally. FreeStyle Libre
sales totaled $3.1 billion in the first nine months of 2022, which reflected a
22.8 percent increase, excluding the effect of foreign exchange, over the first
nine months of 2021 when FreeStyle Libre sales totaled $2.7 billion. During the
third quarter of 2022, Abbott launched its FreeStyle Libre 3 system in the U.S.,
which automatically delivers up-to-the-minute glucose readings and 14-day
accuracy in a wearable sensor.

During the first nine months of 2022, procedure volumes across Abbott's
cardiovascular and neuromodulation businesses were negatively impacted by new
surges of COVID-19 in various geographies as well as intermittent COVID-19
lockdown restrictions in China and healthcare staffing challenges throughout the
nine months. Despite such challenges, overall volume trends improved in several
businesses versus the first nine months of 2021. In Electrophysiology, the 8.2
percent growth, excluding the effect of foreign exchange, reflects the increase
in procedure volumes and the continued roll­out of Abbott's EnSite® X EP System
with Ensite Omnipolar Technology (OT), a new cardiac mapping platform available
in the U.S., Japan and across Europe. In January 2022, Abbott announced FDA
clearance for the EnSite® X EP System with EnSite OT. The system leverages the
Advisor® HD Grid Catheter to provide a 360­degree view of the heart without
regard to the orientation of the catheter in the heart.

Growth in Structural Heart during the first nine months of 2022, excluding the
effect of foreign exchange, was 12.8 percent, driven by growth across several
areas of the business, including Amplatzer®_Amulet® Left Atrial Appendage
Occluder, which offers immediate closure of the left atrial appendage, an area
in the heart where blood clots can form and MitraClip®, Abbott's market-leading
device for the minimally invasive treatment of mitral regurgitation, a leaky
heart valve. In Vascular, sales during the first nine months of 2022, excluding
the impact of foreign exchange, were virtually unchanged as higher endovascular
sales were offset by the negative effect of lower average pricing for
drug-eluting stents (DES) in the U.S. and a lag in the recovery of percutaneous
coronary intervention case rates compared to many other cardiovascular
procedures.

In the first nine months of 2022, Medical Devices received various other product
approvals. In February 2022, Abbott received FDA approval for an expanded
indication for its CardioMEMS® HF system, a small implantable sensor and remote
monitoring system that can detect early warning signs of worsening heart
failure. In April 2022, Abbott announced FDA approval for its Aveir®
single-chamber leadless pacemaker for the treatment of patients in the U.S. with
slow heart rhythms.

The gross profit margin percentage was 50.7 percent for the third quarter of
2022 compared to 54.8 percent for the third quarter of 2021. The decrease
reflects the continued impact of the voluntary product recall and Sturgis
manufacturing stoppage in the Nutritional business during the first half of 2022
as well as the prioritization of infant formula sales related to the Special
Supplemental Nutrition Program for Women, Infants, and Children (WIC). The
decrease also reflects higher manufacturing and supply chain costs across
Abbott's businesses, including inflation, commodities and distribution expenses
as well as lower COVID-19 testing-related sales in 2022 and the nonrecurrence of
a favorable change in estimate in the third quarter of 2021 related to a
previously recognized restructuring plan.

The gross profit margin was 52.1 percent for the first nine months of 2022
compared to 51.6 percent for the first nine months of 2021. The increase
reflects the nonrecurrence of 2021 restructuring charges and the impact of
higher sales of COVID-19 rapid tests during the first nine months of 2022. These
favorable impacts were partially offset by the impact of the voluntary product
recall and Sturgis manufacturing stoppage in the Nutritional business as well as
higher manufacturing and supply chain costs across Abbott's businesses,
including inflation and higher commodity and distribution expenses. The future
extent to which inflation, supply chain disruptions, and unfavorable foreign
exchange rates will have a material effect on Abbott's operating results is
uncertain.

Research and development (R&D) expenses increased $110 million, or 16.2 percent,
in the third quarter of 2022 and increased $183 million, or 9.2 percent, in the
first nine months of 2022 compared to the prior year. The increase in the third
quarter primarily reflects the impairment of certain in-process R&D intangible
assets in the third quarter of 2022. The increase in the first nine months was
also driven by higher spending on various projects to advance products in
development partially offset by the favorable impact of foreign exchange.

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Selling, general and administrative (SG&A) expenses decreased $36 million, or
1.3 percent, in the third quarter of 2022 compared to the prior year as higher
selling and marketing spending to drive growth across various businesses was
more than offset by the favorable impact of foreign exchange. SG&A expenses were
virtually unchanged in the first nine months of 2022 compared to the prior year
as higher selling and marketing spending was offset by the nonrecurrence of
certain 2021 litigation costs and the favorable impact of foreign exchange.

Other (Income) Expense, net



Other income, net increased from $74 million of income in the third quarter of
2021 to $93 million of income in the third quarter of 2022 and from $214 million
of income in the first nine months of 2021 to $253 million of income in the
first nine months of 2022. The increases in the third quarter and the first nine
months of 2022 were primarily due to higher income in 2022 related to the
non-service cost components of net pension and post-retirement medical benefit
costs. In the first nine months of 2022, the higher year-to-date income related
to the non-service cost components was partially offset by the nonrecurrence of
a gain on the sale of an equity method investment that occurred in the second
quarter of 2021.

Interest Expense, net

Interest expense, net declined $37 million in the third quarter of 2022 and $61
million in the first nine months of 2022 versus 2021 due to the impact of higher
interest rates and cash and short-term investment balances on interest income
and the repayment of debt in the first quarter of 2022 partially offset by the
impact of interest rate hedge contracts related to certain fixed-rate debt.

Taxes on Earnings



Taxes on earnings reflect the estimated annual effective rates and include
charges for interest and penalties. In the first nine months of 2022 and 2021,
taxes on earnings include approximately $36 million and $97 million,
respectively, in excess tax benefits associated with share-based compensation.
In the first nine months of 2022, taxes on earnings also include approximately
$20 million of tax expense as the result of the resolution of various tax
positions related to prior years.

Tax authorities in various jurisdictions regularly review Abbott's income tax
filings. Abbott believes that it is reasonably possible that the recorded amount
of gross unrecognized tax benefits may decrease approximately $75 million to
$100 million, including cash adjustments, within the next twelve months as a
result of concluding various domestic and international tax matters.

Liquidity and Capital Resources September 30, 2022 Compared with December 31, 2021



The decrease in cash and cash equivalents from $9.8 billion at December 31, 2021
to $9.6 billion at September 30, 2022 primarily reflects share repurchases, the
payment of dividends, capital expenditures, and the repayment of debt partially
offset by the cash generated from operations in the first nine months of 2022.
Working capital was $11.5 billion at September 30, 2022 and $11.1 billion at
December 31, 2021. The increase in working capital in 2022 primarily reflects an
increase in inventory partially offset by an increase in the current portion of
long-term debt and a decrease in cash and cash equivalents.

In the Condensed Consolidated Statement of Cash Flows, Net cash from operating
activities for the first nine months of 2022 totaled approximately $7.3 billion,
a decrease of $211 million from the prior year primarily due to an increased
investment in working capital partially offset by higher operating earnings. Net
cash from operating activities includes $362 million of pension contributions
and the payment of cash taxes of approximately $987 million in 2022. Net cash
from operating activities includes $366 million of pension contributions and the
payment of cash taxes of approximately $990 million in 2021.

On March 15, 2022, Abbott repaid the $750 million outstanding principal amount of its 2.55% Notes upon maturity.



In September 2019, the board of directors authorized the early redemption of up
to $5 billion of outstanding long-term notes. As of September 30, 2022, $2.15
billion of the $5 billion authorization remains available.

At September 30, 2022, Abbott's long-term debt rating was AA- by Standard & Poor's Corporation and A1 by Moody's Investors Service. Abbott expects to maintain an investment grade rating. Abbott has readily available financial resources, including lines of credit of $5.0 billion which expire in 2025.


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In December 2021, the board of directors authorized the repurchase of up to $5
billion of Abbott's common shares from time to time. The new authorization was
in addition to the $1.081 billion portion of the share repurchase program
authorized in 2019 that was unused as of December 31, 2021. In the first nine
months of 2022, Abbott repurchased 25.7 million of its common shares for $2.965
billion which fully utilized the authorization remaining under the 2019 share
repurchase program and a portion of the 2021 authorization. As of September 30,
2022, $3.116 billion remains available for repurchase under the 2021 repurchase
program.

In each of the first three quarters of 2022, Abbott declared a quarterly
dividend of $0.47 per share on its common shares, which represents an increase
of 4.4 percent over the $0.45 per share dividend declared in each of the first
three quarters of 2021.

Legislative Issues

Abbott's primary markets are highly competitive and subject to substantial
government regulations throughout the world. Abbott expects debate to continue
over the availability, method of delivery, and payment for health care products
and services. It is not possible to predict the extent to which Abbott or the
health care industry in general might be adversely affected by these factors in
the future. A more complete discussion of these factors is contained in Item 1,
Business, and Item 1A, Risk Factors, in the 2021 Annual Report on Form 10-K.

Private Securities Litigation Reform Act of 1995 - A Caution Concerning Forward-Looking Statements



Under the safe harbor provisions of the Private Securities Litigation Reform Act
of 1995, Abbott cautions that any forward-looking statements made by Abbott are
subject to risks and uncertainties that may cause actual results to differ
materially from those indicated in the forward-looking statements. Economic,
competitive, governmental, technological and other factors that may affect
Abbott's operations are discussed in Item 1A, "Risk Factors" in our Annual
Report on Form 10-K for the year ended December 31, 2021, and are incorporated
herein by reference. 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.

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