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ABBOTT PARK, Ill., July 20, 2022 /PRNewswire/ -- Abbott (NYSE: ABT) today announced financial results for the second quarter ended June 30, 2022.
"We achieved another quarter of strong growth and are raising our full-year EPS guidance," said Robert B. Ford, chairman and chief executive officer, Abbott. "Our new product pipeline has remained highly productive, and our diversified business has continued to be resilient in a challenging macro environment."
SECOND-QUARTER BUSINESS OVERVIEWNote: Management believes that measuring sales growth rates on an organic basis is an appropriate way for investors to best understand the underlying performance of the business. Organic sales growth excludes the impact of foreign exchange.
Following are sales by business segment and commentary for the second quarter 2022:
Total Company($ in millions) | ||||||||||||||||||
% Change vs. 2Q21 | ||||||||||||||||||
Sales 2Q22 | Reported | Organic | ||||||||||||||||
U.S. | Int'l | Total | U.S. | Int'l | Total | U.S. | Int'l | Total | ||||||||||
Total * | 4,892 | 6,365 | 11,257 | 36.6 | (4.2) | 10.1 | 36.6 | 2.3 | 14.3 | |||||||||
Nutrition | 761 | 1,192 | 1,953 | (12.9) | (3.5) | (7.4) | (12.9) | 1.5 | (4.5) | |||||||||
Diagnostics | 2,469 | 1,853 | 4,322 | 113.8 | (11.4) | 33.1 | 113.8 | (5.6) | 36.9 | |||||||||
Established Pharmaceuticals | -- | 1,223 | 1,223 | n/a | 3.7 | 3.7 | n/a | 9.2 | 9.2 | |||||||||
Medical Devices | 1,660 | 2,097 | 3,757 | 7.9 | (1.5) | 2.5 | 7.9 | 7.1 | 7.5 | |||||||||
* Total Q2 2022 Abbott sales include Other Sales of approximately $2 million. |
% Change vs. 1H21 | ||||||||||||||||||
Sales 1H22 | Reported | Organic | ||||||||||||||||
U.S. | Int'l | Total | U.S. | Int'l | Total | U.S. | Int'l | Total | ||||||||||
Total * | 9,829 | 13,323 | 23,152 | 32.5 | 0.5 | 12.0 | 32.5 | 6.7 | 15.9 | |||||||||
Nutrition | 1,438 | 2,409 | 3,847 | (15.9) | (1.1) | (7.2) | (15.9) | 3.6 | (4.4) | |||||||||
Diagnostics | 5,210 | 4,398 | 9,608 | 86.4 | (1.5) | 32.3 | 86.4 | 4.3 | 35.9 | |||||||||
Established Pharmaceuticals | -- | 2,370 | 2,370 | n/a | 5.3 | 5.3 | n/a | 11.2 | 11.2 | |||||||||
Medical Devices | 3,176 | 4,146 | 7,322 | 9.9 | 1.2 | 4.8 | 9.9 | 9.0 | 9.4 | |||||||||
* Total 1H 2022 Abbott sales include Other Sales of approximately $5 million. |
n/a = Not Applicable. |
Note: 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. |
Second-quarter 2022 worldwide sales of $11.3 billion increased 10.1 percent on a reported basis and 14.3 percent on an organic basis.
Worldwide sales, excluding COVID-19 testing-related sales, decreased 0.3 percent on a reported basis and increased 4.1 percent on an organic basis in the quarter.4 Worldwide sales were negatively impacted by a voluntary recall and manufacturing shutdown initiated in February of certain infant formula products manufactured at one of Abbott's U.S. plants. Excluding COVID-19 testing-related sales and the U.S. sales associated with the recalled products in the current and prior years, total worldwide sales increased 1.6 percent on a reported basis and 6.2 percent on an organic basis in the second quarter. 5
Nutrition($ in millions) | ||||||||||||||||||
% Change vs. 2Q21 | ||||||||||||||||||
Sales 2Q22 | Reported | Organic | ||||||||||||||||
U.S. | Int'l | Total | U.S. | Int'l | Total | U.S. | Int'l | Total | ||||||||||
Total | 761 | 1,192 | 1,953 | (12.9) | (3.5) | (7.4) | (12.9) | 1.5 | (4.5) | |||||||||
Pediatric | 413 | 512 | 925 | (21.6) | (9.5) | (15.3) | (21.6) | (5.8) | (13.4) | |||||||||
Adult | 348 | 680 | 1,028 | 0.5 | 1.6 | 1.2 | 0.5 | 7.6 | 5.2 | |||||||||
% Change vs. 1H21 | ||||||||||||||||||
Sales 1H22 | Reported | Organic | ||||||||||||||||
U.S. | Int'l | Total | U.S. | Int'l | Total | U.S. | Int'l | Total | ||||||||||
Total | 1,438 | 2,409 | 3,847 | (15.9) | (1.1) | (7.2) | (15.9) | 3.6 | (4.4) | |||||||||
Pediatric | 751 | 1,021 | 1,772 | (27.5) | (9.1) | (17.9) | (27.5) | (5.6) | (16.1) | |||||||||
Adult | 687 | 1,388 | 2,075 | 2.1 | 5.8 | 4.6 | 2.1 | 11.5 | 8.3 | |||||||||
Worldwide Nutrition sales decreased 7.4 percent on a reported basis and 4.5 percent on an organic basis in the second quarter. Total worldwide Nutrition and Pediatric Nutrition sales were negatively impacted by a voluntary recall and manufacturing shutdown initiated in February of certain infant formula products manufactured at one of Abbott's U.S. plants. On July 1, Abbott restarted partial production at the facility. Excluding the U.S. sales associated with these products in the current and prior years, total worldwide Nutrition sales increased 0.5 percent on a reported basis and 3.8 percent on an organic basis in the second quarter.6
In Adult Nutrition, Ensure®, Abbott's market-leading complete and balanced nutrition brand, and Glucerna®, Abbott's market-leading diabetes nutrition brand, led to global sales growth of 1.2 percent on a reported basis and 5.2 percent on an organic basis.
Diagnostics($ in millions) | ||||||||||||||||||
% Change vs. 2Q21 | ||||||||||||||||||
Sales 2Q22 | Reported | Organic | ||||||||||||||||
U.S. | Int'l | Total | U.S. | Int'l | Total | U.S. | Int'l | Total | ||||||||||
Total | 2,469 | 1,853 | 4,322 | 113.8 | (11.4) | 33.1 | 113.8 | (5.6) | 36.9 | |||||||||
Core Laboratory | 287 | 934 | 1,221 | 1.3 | (8.6) | (6.5) | 1.3 | (2.0) | (1.3) | |||||||||
Molecular | 71 | 141 | 212 | (23.7) | (28.4) | (26.9) | (23.7) | (24.4) | (24.2) | |||||||||
Point of Care | 101 | 38 | 139 | 3.2 | (3.7) | 1.2 | 3.2 | 0.3 | 2.4 | |||||||||
Rapid Diagnostics | 2,010 | 740 | 2,750 | 195.4 | (11.2) | 81.7 | 195.4 | (5.8) | 84.6 | |||||||||
% Change vs. 1H21 | ||||||||||||||||||
Sales 1H22 | Reported | Organic | ||||||||||||||||
U.S. | Int'l | Total | U.S. | Int'l | Total | U.S. | Int'l | Total | ||||||||||
Total | 5,210 | 4,398 | 9,608 | 86.4 | (1.5) | 32.3 | 86.4 | 4.3 | 35.9 | |||||||||
Core Laboratory | 555 | 1,850 | 2,405 | 0.1 | (4.3) | (3.4) | 0.1 | 1.7 | 1.3 | |||||||||
Molecular | 243 | 389 | 632 | (9.4) | (16.9) | (14.2) | (9.4) | (12.4) | (11.3) | |||||||||
Point of Care | 192 | 75 | 267 | 1.2 | (1.7) | 0.4 | 1.2 | 2.0 | 1.4 | |||||||||
Rapid Diagnostics | 4,220 | 2,084 | 6,304 | 136.6 | 4.9 | 67.2 | 136.6 | 10.9 | 70.4 | |||||||||
Worldwide Diagnostics sales increased 33.1 percent on a reported basis and 36.9 percent on an organic basis in the second quarter. Global COVID-19 testing-related sales were $2.3 billion in the quarter, led by sales of testing products in Rapid Diagnostics.
Sales in Core Laboratory and Molecular Diagnostics were impacted by year-over-year declines in COVID-19 testing-related sales in these businesses. Excluding COVID-19 testing-related sales, Core Laboratory Diagnostics sales decreased 3.1 percent on a reported basis and increased 2.3 percent on an organic basis and Molecular Diagnostics sales increased 17.9 percent on a reported basis and 22.3 percent on an organic basis in the second quarter.7
Established Pharmaceuticals($ in millions) | ||||||||||||||||||
% Change vs. 2Q21 | ||||||||||||||||||
Sales 2Q22 | Reported | Organic | ||||||||||||||||
U.S. | Int'l | Total | U.S. | Int'l | Total | U.S. | Int'l | Total | ||||||||||
Total | -- | 1,223 | 1,223 | n/a | 3.7 | 3.7 | n/a | 9.2 | 9.2 | |||||||||
Key Emerging Markets | -- | 931 | 931 | n/a | 1.8 | 1.8 | n/a | 7.1 | 7.1 | |||||||||
Other | -- | 292 | 292 | n/a | 10.3 | 10.3 | n/a | 16.7 | 16.7 | |||||||||
% Change vs. 1H21 | ||||||||||||||||||
Sales 1H22 | Reported | Organic | ||||||||||||||||
U.S. | Int'l | Total | U.S. | Int'l | Total | U.S. | Int'l | Total | ||||||||||
Total | -- | 2,370 | 2,370 | n/a | 5.3 | 5.3 | n/a | 11.2 | 11.2 | |||||||||
Key Emerging Markets | -- | 1,833 | 1,833 | n/a | 5.6 | 5.6 | n/a | 11.8 | 11.8 | |||||||||
Other | -- | 537 | 537 | n/a | 4.5 | 4.5 | n/a | 9.2 | 9.2 | |||||||||
Established Pharmaceuticals sales increased 3.7 percent on a reported basis and 9.2 percent on an organic basis in the second quarter.
Key Emerging Markets include several emerging countries that represent the most attractive long-term growth opportunities for Abbott's branded generics product portfolio. Sales in these geographies increased 1.8 percent on a reported basis and 7.1 percent on an organic basis, led by double-digit growth on a reported and organic basis in several geographies and therapeutic areas, including cardiometabolic, respiratory and central nervous system/pain management.
Other sales increased 10.3 percent on a reported basis and 16.7 percent on an organic basis in the quarter.
Medical Devices($ in millions) | ||||||||||||||||||
% Change vs. 2Q21 | ||||||||||||||||||
Sales 2Q22 | Reported | Organic | ||||||||||||||||
U.S. | Int'l | Total | U.S. | Int'l | Total | U.S. | Int'l | Total | ||||||||||
Total | 1,660 | 2,097 | 3,757 | 7.9 | (1.5) | 2.5 | 7.9 | 7.1 | 7.5 | |||||||||
Rhythm Management | 264 | 284 | 548 | (2.3) | (4.4) | (3.4) | (2.3) | 3.7 | 0.9 | |||||||||
Electrophysiology | 226 | 260 | 486 | 8.6 | (6.8) | (0.2) | 8.6 | 2.2 | 5.0 | |||||||||
Heart Failure | 179 | 62 | 241 | 6.5 | 4.2 | 5.9 | 6.5 | 13.6 | 8.3 | |||||||||
Vascular | 228 | 425 | 653 | (6.7) | (5.8) | (6.1) | (6.7) | 1.2 | (1.6) | |||||||||
Structural Heart | 207 | 233 | 440 | 8.1 | 0.9 | 4.2 | 8.1 | 11.4 | 9.9 | |||||||||
Neuromodulation | 157 | 40 | 197 | (5.2) | (8.7) | (6.0) | (5.2) | 0.2 | (4.1) | |||||||||
Diabetes Care | 399 | 793 | 1,192 | 37.8 | 3.4 | 12.8 | 37.8 | 12.4 | 19.4 | |||||||||
% Change vs. 1H21 | ||||||||||||||||||
Sales 1H22 | Reported | Organic | ||||||||||||||||
U.S. | Int'l | Total | U.S. | Int'l | Total | U.S. | Int'l | Total | ||||||||||
Total | 3,176 | 4,146 | 7,322 | 9.9 | 1.2 | 4.8 | 9.9 | 9.0 | 9.4 | |||||||||
Rhythm Management | 512 | 560 | 1,072 | 0.3 | (2.7) | (1.3) | 0.3 | 4.4 | 2.5 | |||||||||
Electrophysiology | 442 | 529 | 971 | 14.0 | (0.1) | 5.8 | 14.0 | 8.0 | 10.5 | |||||||||
Heart Failure | 346 | 116 | 462 | 10.6 | 7.3 | 9.7 | 10.6 | 15.9 | 11.9 | |||||||||
Vascular | 437 | 835 | 1,272 | (6.0) | (3.7) | (4.5) | (6.0) | 2.6 | (0.4) | |||||||||
Structural Heart | 397 | 454 | 851 | 10.4 | 3.4 | 6.5 | 10.4 | 12.8 | 11.7 | |||||||||
Neuromodulation | 300 | 76 | 376 | (3.4) | (9.1) | (4.6) | (3.4) | (0.9) | (2.9) | |||||||||
Diabetes Care | 742 | 1,576 | 2,318 | 36.8 | 5.5 | 13.8 | 36.8 | 13.7 | 19.8 | |||||||||
Worldwide Medical Devices sales increased 2.5 percent on a reported basis and 7.5 percent on an organic basis in the second quarter. Sales growth was negatively impacted by reduced cardiovascular and neuromodulation procedure volumes as a result of recent surges of COVID-19 in several geographies, healthcare staffing challenges and lockdowns in China that were implemented to control the spread of the virus.
In Diabetes Care, FreeStyle Libre sales were approximately $1.1 billion in the quarter, which represents sales growth of 18.7 percent on a reported basis and 25.6 percent on an organic basis.
ABBOTT'S EARNINGS-PER-SHARE GUIDANCEAbbott is raising its projected full-year 2022 diluted earnings per share under GAAP to at least $3.50. Abbott forecasts specified items for the full-year 2022 of $1.40 per share primarily related to intangible amortization, costs related to a voluntary recall, expenses associated with acquisitions, restructurings and cost reduction initiatives and other net expenses. Excluding specified items, Abbott is raising its projected adjusted diluted earnings per share to at least $4.90 for the full-year 2022.
ABBOTT DECLARES 394TH CONSECUTIVE QUARTERLY DIVIDENDOn June 10, 2022, the board of directors of Abbott declared the company's quarterly dividend of $0.47 per share. Abbott's cash dividend is payable Aug. 15, 2022, to shareholders of record at the close of business on July 15, 2022.
Abbott has increased its dividend payout for 50 consecutive years and is a member of the S&P 500 Dividend Aristocrats Index, which tracks companies that have annually increased their dividend for at least 25 consecutive years.
About Abbott:Abbott is a global healthcare leader that helps people live more fully at all stages of life. Our portfolio of life-changing technologies spans the spectrum of healthcare, with leading businesses and products in diagnostics, medical devices, nutritionals and branded generic medicines. Our 113,000 colleagues serve people in more than 160 countries.
Connect with us at www.abbott.com, on LinkedIn at www.linkedin.com/company/abbott-/, on Facebook at www.facebook.com/Abbott and on Twitter @AbbottNews.
Abbott will live-webcast its second-quarter earnings conference call through its Investor Relations website at www.abbottinvestor.com at 8 a.m. Central time today. An archived edition of the webcast will be available later in the day.
— Private Securities Litigation Reform Act of 1995 —A Caution Concerning Forward-Looking Statements
Some statements in this news release may be forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. Abbott cautions that these forward-looking statements 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 Dec. 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.
1 | All reported amounts relate to continuing operations only as there are no discontinued operations in the periods presented. |
2 | Data on file, Abbott Diabetes Care. Comparison based on publicly available information. |
3 | Among patient-applied sensors. Data on file, Abbott Diabetes Care. |
4 | In the second quarter of 2022, COVID-19 testing-related sales were $2.324 billion. In the second quarter of 2021, total worldwide sales were $10.223 billion, which included COVID-19 testing-related sales of $1.267 billion. |
5 | In the second quarter of 2022, U.S. sales of certain infant formula products were $116 million. In the second quarter of 2021, U.S. sales of certain infant formula products were $280 million. |
6 | In the second quarter of 2021, worldwide Nutrition sales were $2.108 billion, which included $280 million of U.S. sales of certain infant formula products. |
7 | In the second quarter of 2022, Core Laboratory and Molecular Diagnostics COVID-19 testing-related sales were $12 million and $75 million, respectively. In the second quarter of 2021, worldwide Core Laboratory and Molecular Diagnostics sales were $1.306 billion and $290 million, respectively. Core Laboratory and Molecular Diagnostics COVID-19 testing-related sales in the second quarter of 2021 were $58 million and $173 million, respectively. |
Abbott Laboratories and SubsidiariesCondensed Consolidated Statement of EarningsSecond Quarter Ended June 30, 2022 and 2021(in millions, except per share data)(unaudited) | |||||||
2Q22 | 2Q21 | % Change | |||||
Net Sales | $11,257 | $10,223 | 10.1 | ||||
Cost of products sold, excluding amortization expense | 4,933 | 4,947 | (0.3) | 1) | |||
Amortization of intangible assets | 507 | 504 | 0.7 | ||||
Research and development | 684 | 654 | 4.8 | ||||
Selling, general, and administrative | 2,757 | 2,726 | 1.1 | ||||
Total Operating Cost and Expenses | 8,881 | 8,831 | 0.6 | ||||
Operating Earnings | 2,376 | 1,392 | 70.6 | ||||
Interest expense, net | 106 | 123 | (14.1) | ||||
Other (income) expense, net | (82) | (79) | 3.6 | ||||
Earnings before taxes | 2,352 | 1,348 | 74.4 | ||||
Taxes on earnings | 334 | 159 | 109.2 | ||||
Net Earnings | $2,018 | $1,189 | 69.7 | ||||
Net Earnings Excluding Specified Items, as described below | $2,542 | $2,115 | 20.2 | 2) | |||
Diluted Earnings per Common Share | $1.14 | $0.66 | 72.7 | ||||
Diluted Earnings per Common Share, | |||||||
excluding Specified Items, as described below | $1.43 | $1.17 | 22.2 | 2) | |||
Average Number of Common Shares Outstanding | |||||||
Plus Dilutive Common Stock Options | 1,765 | 1,793 | |||||
NOTES: | |
See tables titled "Non-GAAP Reconciliation of Financial Information" for an explanation of certain non-GAAP financial information. | |
See footnotes on the following below. | |
1) | 2021 Cost of products sold, excluding amortization expense includes approximately $500 million of charges associated with a restructuring plan to align Abbott's manufacturing network for COVID-19 diagnostic tests with changes during the second quarter in projected testing demand. |
2) | 2022 Net Earnings and Diluted Earnings per Common Share, excluding Specified Items, excludes net after-tax charges of $524 million, or $0.29 per share, for intangible amortization, charges related to a voluntary recall and other net expenses primarily associated with acquisitions. |
2021 Net Earnings and Diluted Earnings per Common Share, excluding Specified Items, excludes net after-tax charges of $926 million, or $0.51 per share, for intangible amortization and other net expenses primarily associated with restructuring actions, certain litigation and acquisitions. | |
Abbott Laboratories and SubsidiariesCondensed Consolidated Statement of EarningsFirst Half Ended June 30, 2022 and 2021(in millions, except per share data)(unaudited) | |||||||||||||||
1H22 | 1H21 | % Change | |||||||||||||
Net Sales | $23,152 | $20,679 | 12.0 | ||||||||||||
Cost of products sold, excluding amortization expense | 9,920 | 9,348 | 6.1 | 1) | |||||||||||
Amortization of intangible assets | 1,019 | 1,013 | 0.6 | ||||||||||||
Research and development | 1,381 | 1,308 | 5.6 | ||||||||||||
Selling, general, and administrative | 5,544 | 5,509 | 0.6 | ||||||||||||
Total Operating Cost and Expenses | 17,864 | 17,178 | 4.0 | ||||||||||||
Operating Earnings | 5,288 | 3,501 | 51.0 | ||||||||||||
Interest expense, net | 223 | 247 | (9.9) | ||||||||||||
Net foreign exchange (gain) loss | (3) | 3 | n/m | ||||||||||||
Other (income) expense, net | (160) | (140) | 14.5 | ||||||||||||
Earnings before taxes | 5,228 | 3,391 | 54.2 | ||||||||||||
Taxes on earnings | 763 | 409 | 86.5 | 2) | |||||||||||
Net Earnings | $4,465 | $2,982 | 49.7 | ||||||||||||
Net Earnings Excluding Specified Items, as described below | $5,619 | $4,483 | 25.3 | 3) | |||||||||||
Diluted Earnings per Common Share | $2.51 | $1.66 | 51.2 | ||||||||||||
Diluted Earnings per Common Share, | |||||||||||||||
excluding Specified Items, as described below | $3.16 | $2.49 | 26.9 | 3) | |||||||||||
Average Number of Common Shares Outstanding | |||||||||||||||
Plus Dilutive Common Stock Options | 1,770 | 1,792 | |||||||||||||
NOTES: | |
See tables titled "Non-GAAP Reconciliation of Financial Information" for an explanation of certain non-GAAP financial information. | |
n/m = Percent change is not meaningful. | |
See footnotes on the following below. | |
1) | 2021 Cost of products sold, excluding amortization expense includes approximately $500 million of charges associated with a restructuring plan to align Abbott's manufacturing network for COVID-19 diagnostic tests with changes during the second quarter in projected testing demand. |
2) | 2022 Taxes on Earnings includes the recognition of approximately $27 million of net tax expense as a result of the resolution of various tax positions related to prior years and approximately $32 million in excess tax benefits associated with share-based compensation. |
2021 Taxes on Earnings includes the recognition of approximately $90 million in excess tax benefits associated with share-based compensation. | |
3) | 2022 Net Earnings and Diluted Earnings per Common Share, excluding Specified Items, excludes net after-tax charges of $1.154 billion, or $0.65 per share, for intangible amortization, charges related to a voluntary recall and other net expenses primarily associated with acquisitions. |
2021 Net Earnings and Diluted Earnings per Common Share, excluding Specified Items, excludes net after-tax charges of $1.501 billion, or $0.83 per share, for intangible amortization and other net expenses primarily associated with restructuring actions, certain litigation and acquisitions. | |
Abbott Laboratories and SubsidiariesNon-GAAP Reconciliation of Financial InformationSecond Quarter Ended June 30, 2022 and 2021(in millions, except per share data) (unaudited) | ||||||||
2Q22 | ||||||||
AsReported (GAAP) | Specified Items | As Adjusted | % to Sales | |||||
Intangible Amortization | $ 507 | $ (507) | $ -- | |||||
Gross Margin | 5,817 | 563 | 6,380 | 56.7 % | ||||
R&D | 684 | (32) | 652 | 5.8 % | ||||
SG&A | 2,757 | (14) | 2,743 | 24.4 % | ||||
Other (income) expense, net | (82) | (12) | (94) | |||||
Earnings before taxes | 2,352 | 621 | 2,973 | |||||
Taxes on Earnings | 334 | 97 | 431 | |||||
Net Earnings | 2,018 | 524 | 2,542 | |||||
Diluted Earnings per Share | $1.14 | $0.29 | $1.43 | |||||
Specified items reflect intangible amortization expense of $507 million and other net expenses of $114 million that includes costs associated with a product recall, acquisitions, and other net expenses. See tables titled "Details of Specified Items" for additional details regarding specified items. |
2Q21 | ||||||||
AsReported (GAAP) | Specified Items | As Adjusted | % to Sales | |||||
Intangible Amortization | $ 504 | $ (504) | $ -- | |||||
Gross Margin | 4,772 | 1,048 | 5,820 | 56.9 % | ||||
R&D | 654 | (18) | 636 | 6.2 % | ||||
SG&A | 2,726 | (90) | 2,636 | 25.8 % | ||||
Other (income) expense, net | (79) | 35 | (44) | |||||
Earnings before taxes | 1,348 | 1,121 | 2,469 | |||||
Taxes on Earnings | 159 | 195 | 354 | |||||
Net Earnings | 1,189 | 926 | 2,115 | |||||
Diluted Earnings per Share | $0.66 | $0.51 | $1.17 | |||||
Specified items reflect intangible amortization expense of $504 million and other net expenses of $617 million, primarily associated with restructuring actions, certain litigation, acquisitions and other expenses. See tables titled "Details of Specified Items" for additional details regarding specified items. |
Abbott Laboratories and SubsidiariesNon-GAAP Reconciliation of Financial InformationFirstHalf Ended June 30, 2022 and 2021(in millions, except per share data) (unaudited) | ||||||||
1H22 | ||||||||
AsReported (GAAP) | Specified Items | As Adjusted | % to Sales | |||||
Intangible Amortization | $ 1,019 | $ (1,019) | $ -- | |||||
Gross Margin | 12,213 | 1,199 | 13,412 | 57.9 % | ||||
R&D | 1,381 | (65) | 1,316 | 5.7 % | ||||
SG&A | 5,544 | (53) | 5,491 | 23.7 % | ||||
Other (income) expense, net | (160) | (27) | (187) | |||||
Earnings before taxes | 5,228 | 1,344 | 6,572 | |||||
Taxes on Earnings | 763 | 190 | 953 | |||||
Net Earnings | 4,465 | 1,154 | 5,619 | |||||
Diluted Earnings per Share | $2.51 | $0.65 | $3.16 | |||||
Specified items reflect intangible amortization expense of $1.019 billion and other net expenses of $325 million that includes costs associated with a product recall, acquisitions, and other net expenses. See tables titled "Details of Specified Items" for additional details regarding specified items. |
1H21 | ||||||||
AsReported (GAAP) | Specified Items | As Adjusted | % to Sales | |||||
Intangible Amortization | $ 1,013 | $ (1,013) | $ -- | |||||
Gross Margin | 10,318 | 1,597 | 11,915 | 57.6 % | ||||
R&D | 1,308 | (46) | 1,262 | 6.1 % | ||||
SG&A | 5,509 | (244) | 5,265 | 25.5 % | ||||
Other (income) expense, net | (140) | 23 | (117) | |||||
Earnings before taxes | 3,391 | 1,864 | 5,255 | |||||
Taxes on Earnings | 409 | 363 | 772 | |||||
Net Earnings | 2,982 | 1,501 | 4,483 | |||||
Diluted Earnings per Share | $1.66 | $0.83 | $2.49 | |||||
Specified items reflect intangible amortization expense of $1.013 billion and other net expenses of $851 million, primarily associated with restructuring actions, certain litigation, acquisitions and other expenses. See tables titled "Details of Specified Items" for additional details regarding specified items. |
A reconciliation of the second-quarter tax rates for 2022 and 2021 is shown below: |
2Q22 | |||||||
($ in millions) | Pre-Tax Income | Taxes on Earnings | Tax Rate | ||||
As reported (GAAP) | $2,352 | $ 334 | 14.2 % | ||||
Specified items | 621 | 97 | |||||
Excluding specified items | $2,973 | $431 | 14.5 % | ||||
2Q21 | |||||||
($ in millions) | Pre-Tax Income | Taxes on Earnings | Tax Rate | ||||
As reported (GAAP) | $1,348 | $159 | 11.9 % | ||||
Specified items | 1,121 | 195 | |||||
Excluding specified items | $2,469 | $354 | 14.4 % | ||||
A reconciliation of the year-to-date tax rates for 2022 and 2021 is shown below: |
1H22 | ||||||||
($ in millions) | Pre-Tax Income | Taxes on Earnings | Tax Rate | |||||
As reported (GAAP) | $5,228 | $ 763 | 14.6 % | 1) | ||||
Specified items | 1,344 | 190 | ||||||
Excluding specified items | $6,572 | $953 | 14.5 % | |||||
1H21 | ||||||||
($ in millions) | Pre-Tax Income | Taxes on Earnings | Tax Rate | |||||
As reported (GAAP) | $3,391 | $409 | 12.1 % | 2) | ||||
Specified items | 1,864 | 363 | ||||||
Excluding specified items | $5,255 | $772 | 14.7 % | |||||
1) | 2022 Taxes on Earnings includes the recognition of approximately $27 million of net tax expense as a result of the resolution of various tax positions related to prior years and approximately $32 million in excess tax benefits associated with share-based compensation. |
2) | 2021 Taxes on Earnings includes the recognition of approximately $90 million in excess tax benefits associated with share-based compensation. |
Abbott Laboratories and SubsidiariesDetails of Specified ItemsSecond Quarter Ended June 30, 2022(in millions, except per share data)(unaudited) | |||||||||
Acquisition or Divestiture-related (a) | Restructuring and Cost Reduction Initiatives (b) | Intangible Amortization | Other (c) | Total Specifieds | |||||
Gross Margin | $ 20 | $ (6) | $ 507 | $ 42 | $ 563 | ||||
R&D | (5) | -- | -- | (27) | (32) | ||||
SG&A | (7) | -- | -- | (7) | (14) | ||||
Other (income) expense, net | (4) | -- | -- | (8) | (12) | ||||
Earnings before taxes | $ 36 | $ (6) | $ 507 | $ 84 | 621 | ||||
Taxes on Earnings (d) | 97 | ||||||||
Net Earnings | $ 524 | ||||||||
Diluted Earnings per Share | $ 0.29 | ||||||||
The table above provides additional details regarding the specified items described on tables titled "Non-GAAP Reconciliation of Financial Information." | |
a) | Acquisition-related expenses include integration costs, which represent incremental costs directly related to integrating the acquired businesses and include expenditures for the integration of systems, processes and business activities. |
b) | Restructuring and cost reduction initiative expenses include severance, outplacement, and other direct costs associated with specific restructuring plans and cost reduction initiatives. The Gross Margin amount includes a credit associated with the charges taken in the second quarter of 2021 for a restructuring plan related to Abbott's manufacturing network for COVID-19 diagnostic tests. |
c) | Other includes costs related to a voluntary recall within the Nutrition segment and incremental costs to comply with the European Union's Medical Device (MDR) and In Vitro Diagnostics Medical Device (IVDR) Regulations for previously approved products. |
d) | Reflects the net tax benefit associated with the specified items and excess tax benefits associated with share-based compensation. |
Abbott Laboratories and SubsidiariesDetails of Specified ItemsSecond Quarter Ended June 30, 2021(in millions, except per share data)(unaudited) | ||||||||||
Acquisition or Divestiture-related (a) | Restructuring and Cost Reduction Initiatives (b) | Intangible Amortization | Other (c) | Total Specifieds | ||||||
Gross Margin | $ 21 | $ 510 | $ 504 | $ 13 | $ 1,048 | |||||
R&D | (3) | 1 | -- | (16) | (18) | |||||
SG&A | (18) | 2 | -- | (74) | (90) | |||||
Other (income) expense, net | (3) | -- | -- | 38 | 35 | |||||
Earnings before taxes | $ 45 | $ 507 | $ 504 | $ 65 | 1,121 | |||||
Taxes on Earnings (d) | 195 | |||||||||
Net Earnings | $ 926 | |||||||||
Diluted Earnings per Share | $ 0.51 | |||||||||
The table above provides additional details regarding the specified items on tables titled "Non-GAAP Reconciliation of Financial Information." | |
a) | Acquisition-related expenses include integration costs, which represent incremental costs directly related to integrating the acquired businesses and include expenditures for the integration of systems, processes and business activities. |
b) | Restructuring and cost reduction initiative expenses include severance, outplacement, and other direct costs associated with specific restructuring plans and cost reduction initiatives. Restructuring and cost reduction plans consist of distinct initiatives to streamline operations including the consolidation and rationalization of business activities and facilities, workforce reductions, the transfer of product lines between manufacturing facilities, and the transfer of other business activities between sites. The Gross Margin amount includes charges associated with a restructuring plan to align Abbott's manufacturing network for COVID-19 diagnostic tests with changes during the second quarter in projected testing demand. |
c) | Other includes costs related to certain litigation and the impairment of an intangible asset, as well as a gain on the disposition of an equity method investment. |
d) | Reflects the net tax benefit associated with the specified items and excess tax benefits associated with share-based compensation. |
Abbott Laboratories and SubsidiariesDetails of Specified ItemsFirst Half Ended June 30, 2022(in millions, except per share data)(unaudited) | ||||||||||
Acquisition or Divestiture-related (a) | Restructuring and Cost Reduction Initiatives (b) | Intangible Amortization | Other (c) | Total Specifieds | ||||||
Gross Margin | $ 41 | $ (12) | $ 1,019 | $ 151 | $ 1,199 | |||||
R&D | (7) | (1) | -- | (57) | (65) | |||||
SG&A | (18) | -- | -- | (35) | (53) | |||||
Other (income) expense, net | (11) | -- | -- | (16) | (27) | |||||
Earnings before taxes | $ 77 | $ (11) | $ 1,019 | $ 259 | 1,344 | |||||
Taxes on Earnings (d) | 190 | |||||||||
Net Earnings | $ 1,154 | |||||||||
Diluted Earnings per Share | $ 0.65 | |||||||||
The table above provides additional details regarding the specified items on tables titled "Non-GAAP Reconciliation of Financial Information." | |
a) | Acquisition-related expenses include integration costs, which represent incremental costs directly related to integrating the acquired businesses and include expenditures for the integration of systems, processes and business activities. |
b) | Restructuring and cost reduction initiative expenses include severance, outplacement, and other direct costs associated with specific restructuring plans and cost reduction initiatives. The Gross Margin amount includes a credit associated with the charges taken in the second quarter of 2021 for a restructuring plan related to Abbott's manufacturing network for COVID-19 diagnostic tests. |
c) | Other includes charges related to a voluntary recall within the Nutrition segment and incremental costs to comply with the European Union's Medical Device (MDR) and In Vitro Diagnostics Medical Device (IVDR) Regulations for previously approved products. |
d) | Reflects the net tax benefit associated with the specified items, excess tax benefits associated with share-based compensation and net tax expense as a result of the resolution of various tax positions related to prior years. |
Abbott Laboratories and SubsidiariesDetails of Specified ItemsFirst Half Ended June 30, 2021(in millions, except per share data)(unaudited) | ||||||||||
Acquisition or Divestiture-related (a) | Restructuring and Cost Reduction Initiatives (b) | Intangible Amortization | Other (c) | Total Specifieds | ||||||
Gross Margin | $ 40 | $ 529 | $ 1,013 | $ 15 | $ 1,597 | |||||
R&D | (5) | 1 | -- | (42) | (46) | |||||
SG&A | (31) | 1 | -- | (214) | (244) | |||||
Other (income) expense, net | (3) | 1 | -- | 25 | 23 | |||||
Earnings before taxes | $ 79 | $ 526 | $ 1,013 | $ 246 | 1,864 | |||||
Taxes on Earnings (d) | 363 | |||||||||
Net Earnings | $ 1,501 | |||||||||
Diluted Earnings per Share | $ 0.83 | |||||||||
The table above provides additional details regarding the specified items on tables titled "Non-GAAP Reconciliation of Financial Information." | |
a) | Acquisition-related expenses include integration costs, which represent incremental costs directly related to integrating the acquired businesses and include expenditures for the integration of systems, processes and business activities. |
b) | Restructuring and cost reduction initiative expenses include severance, outplacement, and other direct costs associated with specific restructuring plans and cost reduction initiatives. Restructuring and cost reduction plans consist of distinct initiatives to streamline operations including the consolidation and rationalization of business activities and facilities, workforce reductions, the transfer of product lines between manufacturing facilities, and the transfer of other business activities between sites. The Gross Margin amount includes charges associated with a restructuring plan to align Abbott's manufacturing network for COVID-19 diagnostic tests with changes during the second quarter in projected testing demand. |
c) | Other primarily relates to the costs related to certain litigation, the acquisition of a research and development asset, the impairments of an equity investment and an intangible asset, and the gain on the disposition of an equity method investment. |
d) | Reflects the net tax benefit associated with the specified items and excess tax benefits associated with share-based compensation. |
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SOURCE Abbott
