By Matt Grossman
Abbott Laboratories recorded a surge in revenue in its U.S. diagnostics business during the second quarter, fueled by strong demand for the company's Covid-19 testing.
Revenue for the Abbott Park, Ill.-based medical company's U.S. diagnostics segment climbed 23% to $857 million in the period. World-wide, Abbott's diagnostics business grew 4.7% to $1.99 billion.
Abbott provides testing related to Covid-19 on three different platforms. It offers both lab-based and on-site tests for current infections, and provides a lab-based antibody test to check if a person was previously infected with the virus. A decline in testing services for other conditions tempered the segment's results, however.
Abbott Chief Executive Robert Ford told analysts on a conference call Thursday that he expected demand for the company's Covid-19 testing to endure beyond the end of the year.
"Even when you have a vaccine, I think that I can see patients going to a physician's office with a fever, and they want to know: ... Is it the flu? Is it Covid?" Mr. Ford said. "We think that the capacity that we're building is not only for a high demand during the next 12, 18 or 24 months, but a steady state."
Overall, Abbott's sales decreased as the pandemic disrupted demand for its medical devices used in procedures unrelated to the new coronavirus. Sales of medical devices fell 21.2% to $2.42 billion.
The company's revenue overall declined to $7.33 billion from the $7.98 billion recorded in last year's second quarter -- a drop of 8.2%, or 5.4% on an organic basis, which excluded the impact of foreign exchange. Analysts polled by FactSet had estimated quarterly revenue of $6.81 billion.
Sales for Abbott's pharmaceuticals business -- which serves international markets -- declined 8.6% in the quarter to $1.01 billion. Strong growth for the segment in China was offset in countries experiencing continued Covid-19 outbreaks such as Russia, Brazil and Colombia.
The company's overall profit declined to $537 million, or 30 cents a share, from $1.01 billion, or 56 cents a share, in the same period a year earlier.
Adjusted earnings were 57 cents a share. Analysts had forecast adjusted earnings of 42 cents a share.
Abbott also reinstated full-year guidance, forecasting adjusted earnings of at least $3.25 a share, with a spokesman attributing the outlook to momentum the company is beginning to register. Abbott had canceled previous guidance in April, citing uncertainty about the course of the pandemic.
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