Abbott Reports Fourth-Quarter and Full-Year 2023 Results; Issues 2024 Financial Outlook
–Fourth-quarter reported sales increased 1.5 percent; organic sales growth for the underlying base business increased 11.0 percent
–Full-year 2023 reported sales decreased 8.1 percent due to anticipated decline in COVID-19 testing-related sales; organic sales growth for the underlying base business increased 11.6 percent
–Full-year 2023 GAAP diluted EPS of $3.26; adjusted diluted EPS of $4.44
–R&D pipeline continues to deliver steady cadence of new products
ABBOTT PARK, Ill., Jan. 24, 2024 — Abbott today announced financial results for the fourth quarter ended Dec. 31, 2023.
•Fourth-quarter sales increased 1.5 percent on a reported basis, 2.1 percent on an organic basis, and 11.0 percent on an organic basis, excluding COVID-19 testing-related sales1.
•Fourth-quarter GAAP diluted EPS of $0.91 and adjusted diluted EPS of $1.19, which excludes specified items.
•Abbott issues full-year 2024 guidance for diluted EPS on a GAAP basis of $3.20 to $3.40 and full-year adjusted diluted EPS of $4.50 to $4.70.
•Abbott projects full-year 2024 organic sales growth, excluding COVID-19 testing-related sales, to be in the range of 8.0% to 10.0%2.
•In 2023, Abbott continued to recapture market share in the U.S. infant formula market. The company has now reclaimed its previous market-leading position, as measured on a volume basis.
•In December, Abbott announced U.S. Food and Drug Administration (FDA) approval of its new laboratory automation system, GLP systems Track™, to help laboratories optimize performance and safety to better meet the growing demand for diagnostic testing.
•In January, Abbott announced that the first-in-human procedures were conducted using the company's new Volt™ Pulsed Field Ablation (PFA) System to treat patients with heart rhythm disorders such as atrial fibrillation (AFib). These procedures were part of Abbott's Volt CE Mark clinical study. Abbott anticipates approval for its U.S. clinical trial (IDE) for the Volt PFA System in the first half of 2024.
•In January, Abbott announced that Tandem Diabetes Care's t:slim X2™3 insulin pump is the first automated insulin delivery system in the U.S. to integrate with Abbott's new FreeStyle Libre® 2 Plus sensor.
"The strength and diversity of the Abbott portfolio drove our success in 2023," said Robert B. Ford, chairman and chief executive officer, Abbott. "We're entering 2024 with a lot of positive momentum, and with our highly productive pipeline, we're well-positioned for growth in 2024 and beyond."
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FOURTH-QUARTER BUSINESS OVERVIEW
Management believes that measuring sales growth rates on an organic basis, which excludes the impact of foreign exchange, the impact of exiting the pediatric nutrition business in China, and the impact of the acquisition of Cardiovascular Systems, Inc. (CSI), is an appropriate way for investors to best understand the core underlying performance of the business. Management further believes that measuring sales growth rates on an organic basis excluding COVID-19 tests is an appropriate way for investors to best understand underlying base business performance as the COVID-19 pandemic has shifted to an endemic state, resulting in significantly lower demand for COVID-19 tests.
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.
Fourth Quarter 2023 Results (4Q23)
Sales 4Q23 ($ in millions)
Total Company
Nutrition
Diagnostics
Established Pharmaceuticals
Medical Devices
U.S.
3,949
860
1,020
—
2,065
International
6,292
1,178
1,514
1,222
2,378
Total reported
10,241
2,038
2,534
1,222
4,443
% Change vs. 4Q22
U.S.
(6.4)
8.2
(38.8)
n/a
17.6
International
7.2
15.3
(6.0)
0.5
17.5
Total reported
1.5
12.2
(22.7)
0.5
17.5
Impact of foreign exchange
(0.8)
(0.7)
(0.4)
(8.3)
1.0
Impact of CSI acquisition
0.4
—
—
—
1.1
Impact of business exit
(0.2)
(1.0)
—
—
—
Organic
2.1
13.9
(22.3)
8.8
15.4
Impact of COVID-19 testing sales (4)
(8.9)
—
(24.5)
—
—
Organic (excluding COVID-19 tests)
11.0
13.9
2.2
8.8
15.4
U.S.
7.1
8.2
(10.7)
n/a
15.5
International
13.4
18.5
10.9
8.8
15.4
Full-Year 2023 Results (12M23)
Sales 12M23 ($ in millions)
Total Company
Nutrition
Diagnostics
Established Pharmaceuticals
Medical Devices
U.S.
15,452
3,413
4,329
—
7,696
International
24,657
4,741
5,659
5,066
9,191
Total reported
40,109
8,154
9,988
5,066
16,887
% Change vs. 12M22
U.S.
(14.8)
16.9
(49.3)
n/a
15.2
International
(3.3)
4.4
(28.7)
3.1
13.2
Total reported
(8.1)
9.3
(39.4)
3.1
14.1
Impact of foreign exchange
(2.0)
(2.3)
(1.2)
(7.8)
(1.0)
Impact of CSI acquisition
0.3
—
—
—
0.9
Impact of business exit
(0.2)
(1.4)
—
—
—
Organic
(6.2)
13.0
(38.2)
10.9
14.2
Impact of COVID-19 testing sales (4)
(17.8)
—
(44.0)
—
—
Organic (excluding COVID-19 tests)
11.6
13.0
5.8
10.9
14.2
U.S.
11.3
16.9
1.3
n/a
13.3
International
11.7
10.4
8.5
10.9
14.9
Refer to page 16 for a reconciliation of adjusted historical revenue to reported revenue.
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Nutrition
Fourth Quarter 2023 Results (4Q23)
Sales 4Q23 ($ in millions)
Total
Pediatric
Adult
U.S.
860
505
355
International
1,178
480
698
Total reported
2,038
985
1,053
% Change vs. 4Q22
U.S.
8.2
11.4
4.0
International
15.3
12.3
17.4
Total reported
12.2
11.8
12.5
Impact of foreign exchange
(0.7)
(0.5)
(0.9)
Impact of business exit
(1.0)
(2.2)
—
Organic
13.9
14.5
13.4
U.S.
8.2
11.4
4.0
International
18.5
17.9
18.9
Worldwide Nutrition sales increased 12.2 percent on a reported basis and 13.9 percent on an organic basis in the fourth quarter. Refer to page 16 for a reconciliation of adjusted historical revenue to reported revenue.
In Pediatric Nutrition, global sales increased 11.8 percent on a reported basis and 14.5 percent on an organic basis. International sales increased 12.3 percent on a reported basis and 17.9 percent on an organic basis, which was led by strong growth in Canada and several countries in Latin America. In the U.S., sales growth of 11.4 percent was primarily driven by market share recovery in the infant formula business following a voluntary recall of certain products last year.
In Adult Nutrition, global sales increased 12.5 percent on a reported basis and 13.4 percent on an organic basis, which was led by strong global growth of Ensure®, Abbott's market-leading complete and balanced nutrition brand.
Full-Year 2023 Results (12M23)
Sales 12M23 ($ in millions)
Total
Pediatric
Adult
U.S.
3,413
1,977
1,436
International
4,741
1,957
2,784
Total reported
8,154
3,934
4,220
% Change vs. 12M22
U.S.
16.9
26.6
5.8
International
4.4
2.0
6.2
Total reported
9.3
13.0
6.1
Impact of foreign exchange
(2.3)
(1.8)
(2.7)
Impact of business exit
(1.4)
(3.1)
—
Organic
13.0
17.9
8.8
U.S.
16.9
26.6
5.8
International
10.4
10.3
10.4
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Diagnostics
Fourth Quarter 2023 Results (4Q23)
Sales 4Q23 ($ in millions)
Total
Core Laboratory
Molecular
Point of Care
Rapid Diagnostics *
U.S.
1,020
326
44
107
543
International
1,514
1,044
109
42
319
Total reported
2,534
1,370
153
149
862
% Change vs. 4Q22
U.S.
(38.8)
8.3
(27.7)
20.7
(55.3)
International
(6.0)
8.4
(7.8)
(1.0)
(34.4)
Total reported
(22.7)
8.4
(14.6)
13.6
(49.3)
Impact of foreign exchange
(0.4)
(0.7)
0.3
0.6
(0.1)
Organic
(22.3)
9.1
(14.9)
13.0
(49.2)
Impact of COVID-19 testing sales (4)
(24.5)
(0.6)
(16.6)
—
(35.5)
Organic (excluding COVID-19 tests)
2.2
9.7
1.7
13.0
(13.7)
U.S.
(10.7)
8.8
(12.6)
20.7
(29.2)
International
10.9
10.0
8.2
(2.9)
18.6
As expected, Diagnostics sales growth in the fourth quarter was negatively impacted by year-over-year declines in COVID-19 testing-related sales4. Worldwide COVID-19 testing sales were $288 million in the fourth quarter of 2023 compared to $1.069 billion in the fourth quarter of the prior year.
Excluding COVID-19 testing-related sales, global Diagnostics sales increased 1.7 percent on a reported basis and 2.2 percent on an organic basis.
Full-Year 2023 Results (12M23)
Sales 12M23 ($ in millions)
Total
Core Laboratory
Molecular
Point of Care
Rapid Diagnostics *
U.S.
4,329
1,243
172
396
2,518
International
5,659
3,916
402
169
1,172
Total reported
9,988
5,159
574
565
3,690
% Change vs. 12M22
U.S.
(49.3)
9.3
(53.6)
6.4
(62.1)
International
(28.7)
4.4
(35.7)
10.3
(65.6)
Total reported
(39.4)
5.5
(42.3)
7.5
(63.3)
Impact of foreign exchange
(1.2)
(2.9)
(0.7)
(0.2)
(0.4)
Organic
(38.2)
8.4
(41.6)
7.7
(62.9)
Impact of COVID-19 testing sales (4)
(44.0)
(1.0)
(33.5)
—
(64.2)
Organic (excluding COVID-19 tests)
5.8
9.4
(8.1)
7.7
1.3
U.S.
1.3
10.1
(17.8)
6.4
(4.8)
International
8.5
9.1
(3.8)
10.8
11.6
*The Acelis Connected Health business was internally transferred from Rapid Diagnostics to Heart Failure on January 1, 2023. As a result, $28 million of sales in the fourth quarter of 2022 and $115 million in the full-year 2022 were moved from Rapid Diagnostics to Heart Failure.
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Established Pharmaceuticals
Fourth Quarter 2023 Results (4Q23)
Sales 4Q23 ($ in millions)
Total
Key Emerging Markets
Other
U.S.
—
—
—
International
1,222
918
304
Total reported
1,222
918
304
% Change vs. 4Q22
U.S.
n/a
n/a
n/a
International
0.5
0.5
0.4
Total reported
0.5
0.5
0.4
Impact of foreign exchange
(8.3)
(10.9)
(0.4)
Organic
8.8
11.4
0.8
U.S.
n/a
n/a
n/a
International
8.8
11.4
0.8
Established Pharmaceuticals sales increased 0.5 percent on a reported basis and 8.8 percent on an organic basis in the fourth 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 0.5 percent on a reported basis and increased 11.4 percent on an organic basis, led by growth in several geographies and therapeutic areas, including cardiometabolic, gastroenterology, respiratory, and central nervous system/pain management.
Full-Year 2023 Results (12M23)
Sales 12M23 ($ in millions)
Total
Key Emerging Markets
Other
U.S.
—
—
—
International
5,066
3,807
1,259
Total reported
5,066
3,807
1,259
% Change vs. 12M22
U.S.
n/a
n/a
n/a
International
3.1
1.1
9.8
Total reported
3.1
1.1
9.8
Impact of foreign exchange
(7.8)
(9.2)
(3.0)
Organic
10.9
10.3
12.8
U.S.
n/a
n/a
n/a
International
10.9
10.3
12.8
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Medical Devices
Fourth Quarter 2023 Results (4Q23)
Sales 4Q23 ($ in millions)
Total
Rhythm Management
Electro- physiology
Heart Failure *
Vascular
Structural Heart
Neuro-modulation
Diabetes Care
U.S.
2,065
285
279
227
245
231
197
601
International
2,378
297
314
74
432
267
43
951
Total reported
4,443
582
593
301
677
498
240
1,552
% Change vs. 4Q22
U.S.
17.6
12.0
15.0
13.6
14.8
7.9
20.8
28.3
International
17.5
14.5
28.0
26.6
10.4
17.6
10.2
18.4
Total reported
17.5
13.3
21.5
16.6
12.0
12.9
18.8
22.0
Impact of foreign exchange
1.0
1.2
0.3
1.2
1.1
1.5
—
1.3
Impact of CSI acquisition
1.1
—
—
—
6.4
—
—
—
Organic
15.4
12.1
21.2
15.4
4.5
11.4
18.8
20.7
U.S.
15.5
12.0
15.0
13.6
(2.5)
7.9
20.8
28.3
International
15.4
12.1
27.3
21.4
8.3
14.7
10.2
16.2
Worldwide Medical Devices sales increased 17.5 percent on a reported basis and 15.4 percent on an organic basis in the fourth quarter. Sales growth was led by double-digit organic growth in Diabetes Care, Neuromodulation, Structural Heart, Electrophysiology, Heart Failure, and Rhythm Management. Several recently launched products and new indications contributed to the strong performance, including Amplatzer®, Amulet®, Navitor®, TriClip®, and AVEIR®.
In Electrophysiology, internationally, sales grew more than 25.0 percent on a reported and organic basis, which included sales growth of more than 20.0 percent in Europe.
In Diabetes Care, FreeStyle Libre sales were $1.4 billion, which represents sales growth of 25.5 percent on a reported basis and 23.8 percent on an organic basis.
Full-Year 2023 Results (12M23)
Sales 12M23 ($ in millions)
Total
Rhythm Management
Electro- physiology
Heart Failure *
Vascular
Structural Heart
Neuro-modulation
Diabetes Care
U.S.
7,696
1,085
1,008
888
978
883
725
2,129
International
9,191
1,170
1,187
273
1,703
1,061
165
3,632
Total reported
16,887
2,255
2,195
1,161
2,681
1,944
890
5,761
% Change vs. 12M22
U.S.
15.2
5.5
10.8
9.6
13.2
7.9
17.2
30.3
International
13.2
7.4
16.6
21.1
5.2
18.7
9.0
16.3
Total reported
14.1
6.5
13.9
12.1
8.0
13.6
15.5
21.1
Impact of foreign exchange
(1.0)
(1.0)
(2.0)
0.1
(1.3)
(0.7)
(0.9)
(0.8)
Impact of CSI acquisition
0.9
—
—
—
5.3
—
—
—
Organic
14.2
7.5
15.9
12.0
4.0
14.3
16.4
21.9
U.S.
13.3
5.5
10.8
9.6
(1.0)
7.9
17.2
30.3
International
14.9
9.4
20.5
20.5
6.7
20.1
13.1
17.5
*The Acelis Connected Health business was internally transferred from Rapid Diagnostics to Heart Failure on January 1, 2023. As a result, $28 million of sales in the fourth quarter of 2022 and $115 million in the full-year 2022 were moved from Rapid Diagnostics to Heart Failure.
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ABBOTT'S EARNINGS-PER-SHARE GUIDANCE
Abbott projects full-year 2024 diluted earnings per share under GAAP of $3.20 to $3.40. Abbott forecasts specified items for the full-year 2024 of $1.30 per share primarily related to intangible amortization, costs associated with acquisitions, restructuring and cost reduction initiatives and other net expenses. Excluding specified items, projected adjusted diluted earnings per share would be $4.50 to $4.70 for the full-year 2024.
On Dec. 15, 2023, the board of directors of Abbott declared the company's quarterly dividend of $0.55 per share. Abbott's cash dividend is payable Feb. 15, 2024, to shareholders of record at the close of business on Jan. 12, 2024.
Abbott has increased its dividend payout for 52 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 114,000 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 fourth-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.
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— 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 December 31, 2022, 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.
Abbott Financial:
Michael Comilla, 224-668-1872 Tamika LeBean 224-399-5082
Ryan Aliff, 224-667-2299
Abbott Media:
Karen Twigg May, 224-668-2681
Kate Dyer, 224-668-9965
1In the fourth quarter of 2023, total worldwide sales were $10.241 billion and COVID-19 testing-related sales were $288 million. In the fourth quarter of 2022, total worldwide sales were $10.091 billion and COVID-19 testing-related sales were $1.069 billion.
2Abbott has not provided the related GAAP financial measure for organic sales growth, excluding COVID-19 testing-related sales, on a forward-looking basis because the company is unable to predict with reasonable certainty the impact of foreign exchange due to the unpredictability of future changes in foreign exchange rates, which could significantly impact reported sales growth. In addition, as the COVID-19 pandemic has shifted to an endemic state, the company has determined that it is unable to predict with reasonable certainty future COVID-19 test sales due to the unpredictability of demand for Covid-19 tests.
3t:slimX2TM is a trademark of Tandem Diabetes Care, Inc.
4Diagnostic sales and COVID-19 testing-related sales in 2023 and 2022 are summarized below:
Sales 4Q23
COVID Tests Sales 4Q23
($ in millions)
U.S.
Int'l
Total
U.S.
Int'l
Total
Total Diagnostics
1,020
1,514
2,534
224
64
288
Core Laboratory
326
1,044
1,370
1
3
4
Molecular
44
109
153
5
2
7
Rapid Diagnostics
543
319
862
218
59
277
Sales 4Q22
COVID Tests Sales 4Q22
($ in millions)
U.S.
Int'l
Total
U.S.
Int'l
Total
Total Diagnostics
1,667
1,610
3,277
776
293
1,069
Core Laboratory
301
963
1,264
3
7
10
Molecular
62
118
180
17
20
37
Rapid Diagnostics
1,216
486
1,702
756
266
1,022
Sales 12M23
COVID Tests Sales 12M23
($ in millions)
U.S.
Int'l
Total
U.S.
Int'l
Total
Total Diagnostics
4,329
5,659
9,988
1,255
331
1,586
Core Laboratory
1,243
3,916
5,159
7
13
20
Molecular
172
402
574
24
19
43
Rapid Diagnostics
2,518
1,172
3,690
1,224
299
1,523
Sales 12M22
COVID Tests Sales 12M22
($ in millions)
U.S.
Int'l
Total
U.S.
Int'l
Total
Total Diagnostics
8,531
7,938
16,469
5,498
2,870
8,368
Core Laboratory
1,137
3,751
4,888
16
46
62
Molecular
370
625
995
190
221
411
Rapid Diagnostics
6,652
3,409
10,061
5,292
2,603
7,895
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Abbott Laboratories and Subsidiaries
Condensed Consolidated Statement of Earnings
Fourth Quarter Ended December 31, 2023 and 2022
(in millions, except per share data)
(unaudited)
4Q23
4Q22
% Change
Net Sales
$10,241
$10,091
1.5
Cost of products sold, excluding amortization expense
4,556
4,593
(0.8)
Amortization of intangible assets
481
496
(3.1)
Research and development
700
725
(3.6)
Selling, general, and administrative
2,724
2,973
(8.3)
Total Operating Cost and Expenses
8,461
8,787
(3.7)
Operating Earnings
1,780
1,304
36.5
Interest expense, net
70
66
5.9
Net foreign exchange (gain) loss
24
(14)
n/m
Other (income) expense, net
(109)
(68)
60.9
Earnings before taxes
1,795
1,320
36.0
Taxes on earnings
201
287
(29.6)
Net Earnings
$1,594
$1,033
54.2
Net Earnings excluding Specified Items, as described below
$2,094
$1,811
15.6
1)
Diluted Earnings per Common Share
$0.91
$0.59
54.2
Diluted Earnings per Common Share,
excluding Specified Items, as described below
$1.19
$1.03
15.5
1)
Average Number of Common Shares Outstanding
Plus Dilutive Common Stock Options
1,748
1,754
NOTES:
See tables on page 13 for an explanation of certain non-GAAP financial information.
n/m = Percent change is not meaningful.
See footnotes on the following page.
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1)2023 Net Earnings and Diluted Earnings per Common Share, excluding Specified Items, excludes net after-tax charges of $500 million, or $0.28 per share, for intangible amortization, charges related to restructuring and cost reduction initiatives, expenses associated with acquisitions and other net expenses.
2022 Net Earnings and Diluted Earnings per Common Share, excluding Specified Items, excludes net after-tax charges of $778 million, or $0.44 per share, for intangible amortization, charges related to restructuring and cost reduction initiatives, expenses associated with acquisitions, and other net expenses.
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Abbott Laboratories and Subsidiaries
Condensed Consolidated Statement of Earnings
Twelve Months Ended December 31, 2023 and 2022
(in millions, except per share data)
(unaudited)
12M23
12M22
% Change
Net Sales
$40,109
$43,653
(8.1)
Cost of products sold, excluding amortization expense
17,975
19,142
(6.1)
Amortization of intangible assets
1,966
2,013
(2.3)
Research and development
2,741
2,888
(5.1)
Selling, general, and administrative
10,949
11,248
(2.7)
Total Operating Cost and Expenses
33,631
35,291
(4.7)
Operating Earnings
6,478
8,362
(22.5)
Interest expense, net
252
375
(33.0)
Net foreign exchange (gain) loss
41
2
n/m
Other (income) expense, net
(479)
(321)
49.3
Earnings before taxes
6,664
8,306
(19.8)
Taxes on earnings
941
1,373
(31.4)
1)
Net Earnings
$5,723
$6,933
(17.5)
Net Earnings excluding Specified Items, as described below
$7,802
$9,466
(17.6)
2)
Diluted Earnings per Common Share
$3.26
$3.91
(16.6)
Diluted Earnings per Common Share,
excluding Specified Items, as described below
$4.44
$5.34
(16.9)
2)
Average Number of Common Shares Outstanding
Plus Dilutive Common Stock Options
1,749
1,764
NOTES:
See tables on page 14 for an explanation of certain non-GAAP financial information.
n/m = Percent change is not meaningful.
See footnotes on the following page.
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Page 11 of 20
1)Taxes on Earnings includes the recognition of approximately $22 million and $43 million of excess tax benefits associated with share-based compensation in 2023 and 2022, respectively.
2)2023 Net Earnings and Diluted Earnings per Common Share, excluding Specified Items, excludes net after-tax charges of $2.079 billion, or $1.18 per share, for intangible amortization, charges related to restructuring and cost reduction initiatives, expenses associated with acquisitions and other net expenses.
2022 Net Earnings and Diluted Earnings per Common Share, excluding Specified Items, excludes net after-tax charges of $2.533 billion, or $1.43 per share, for intangible amortization, charges related to a voluntary recall and restructuring actions, the impairment of R&D intangible assets, acquisition-related costs and other net expenses.
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Page 12 of 20
Abbott Laboratories and Subsidiaries
Non-GAAP Reconciliation of Financial Information
Fourth Quarter Ended December 31, 2023 and 2022
(in millions, except per share data)
(unaudited)
4Q23
As Reported (GAAP)
Specified Items
As Adjusted
Intangible Amortization
$
481
$
(481)
$
—
Gross Margin
5,204
518
5,722
R&D
700
(78)
622
SG&A
2,724
(35)
2,689
Other (income) expense, net
(109)
(9)
(118)
Earnings before taxes
1,795
640
2,435
Taxes on Earnings
201
140
341
Net Earnings
1,594
500
2,094
Diluted Earnings per Share
$
0.91
$
0.28
$
1.19
Specified items reflect intangible amortization expense of $481 million and other net expenses of $159 million associated with restructuring actions, costs associated with acquisitions and other net expenses. See page 17 for additional details regarding specified items.
4Q22
As Reported (GAAP)
Specified Items
As Adjusted
Intangible Amortization
$
496
$
(496)
$
—
Gross Margin
5,002
612
5,614
R&D
725
(71)
654
SG&A
2,973
(144)
2,829
Other (income) expense, net
(68)
(24)
(92)
Earnings before taxes
1,320
851
2,171
Taxes on Earnings
287
73
360
Net Earnings
1,033
778
1,811
Diluted Earnings per Share
$
0.59
$
0.44
$
1.03
Specified items reflect intangible amortization expense of $496 million and other net expenses of $355 million associated with restructuring actions, costs associated with acquisitions and other expenses. See page 18 for additional details regarding specified items.
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Page 13 of 20
Abbott Laboratories and Subsidiaries
Non-GAAP Reconciliation of Financial Information
Twelve Months Ended December 31, 2023 and 2022
(in millions, except per share data)
(unaudited)
12M23
As Reported (GAAP)
Specified Items
As Adjusted
Intangible Amortization
$
1,966
$
(1,966)
$
—
Gross Margin
20,168
2,109
22,277
R&D
2,741
(222)
2,519
SG&A
10,949
(102)
10,847
Other (income) expense, net
(479)
25
(454)
Earnings before taxes
6,664
2,408
9,072
Taxes on Earnings
941
329
1,270
Net Earnings
5,723
2,079
7,802
Diluted Earnings per Share
$
3.26
$
1.18
$
4.44
Specified items reflect intangible amortization expense of $1.966 billion and other net expenses of $442 million associated with restructuring actions, costs associated with acquisitions and other expenses. See page 19 for additional details regarding specified items.
12M22
As Reported (GAAP)
Specified Items
As Adjusted
Intangible Amortization
$
2,013
$
(2,013)
$
—
Gross Margin
22,498
2,351
24,849
R&D
2,888
(282)
2,606
SG&A
11,248
(236)
11,012
Other (income) expense, net
(321)
(55)
(376)
Earnings before taxes
8,306
2,924
11,230
Taxes on Earnings
1,373
391
1,764
Net Earnings
6,933
2,533
9,466
Diluted Earnings per Share
$
3.91
$
1.43
$
5.34
Specified items reflect intangible amortization expense of $2.013 billion and other net expenses of $911 million that includes charges for the impairment of R&D intangible assets, costs associated with a product recall and restructuring actions, acquisition-related costs, and other net expenses. See page 20 for additional details regarding specified items.
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Page 14 of 20
A reconciliation of the fourth-quarter tax rates for 2023 and 2022 is shown below:
4Q23
($ in millions)
Pre-Tax Income
Taxes on Earnings
Tax Rate
As reported (GAAP)
$
1,795
$
201
11.2
%
Specified items
640
140
Excluding specified items
$
2,435
$
341
14.0
%
4Q22
($ in millions)
Pre-Tax Income
Taxes on Earnings
Tax Rate
As reported (GAAP)
$
1,320
$
287
21.7
%
Specified items
851
73
Excluding specified items
$
2,171
$
360
16.5
%
A reconciliation of the year-to-date tax rates for 2023 and 2022 is shown below:
12M23
($ in millions)
Pre-Tax Income
Taxes on Earnings
Tax Rate
As reported (GAAP)
$
6,664
$
941
14.1
%
1)
Specified items
2,408
329
Excluding specified items
$
9,072
$
1,270
14.0
%
12M22
($ in millions)
Pre-Tax Income
Taxes on Earnings
Tax Rate
As reported (GAAP)
$
8,306
$
1,373
16.5
%
2)
Specified items
2,924
391
Excluding specified items
$
11,230
$
1,764
15.7
%
1)2023 Taxes on Earnings includes the recognition of approximately $22 million in excess tax benefits associated with share-based compensation.
2)2022 Taxes on Earnings includes the recognition of approximately $43 million in excess tax benefits associated with share-based compensation.
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Page 15 of 20
Abbott Laboratories and Subsidiaries
Non-GAAP Revenue Reconciliation
Fourth Quarter and Twelve Months Ended December 31, 2023 and 2022
($ in millions)
(unaudited)
4Q23
4Q22
% Change vs. 4Q22
Non-GAAP
Abbott Reported
Impact of CSI acquisition (a)
Impact from business exit (b)
Adjusted Revenue
Abbott Reported
Impact from business exit (b)
Adjusted Revenue
Reported
Adjusted
Organic
Total Company
10,241
(40)
(7)
10,194
10,091
(23)
10,068
1.5
1.3
2.1
U.S.
3,949
(38)
—
3,911
4,219
—
4,219
(6.4)
(7.3)
(7.3)
Intl
6,292
(2)
(7)
6,283
5,872
(23)
5,849
7.2
7.4
8.8
Total Nutrition
2,038
—
(7)
2,031
1,817
(23)
1,794
12.2
13.2
13.9
U.S.
860
—
—
860
795
—
795
8.2
8.2
8.2
Intl
1,178
—
(7)
1,171
1,022
(23)
999
15.3
17.2
18.5
Pediatric Nutrition
985
—
(7)
978
882
(23)
859
11.8
14.0
14.5
U.S.
505
—
—
505
454
—
454
11.4
11.4
11.4
Intl
480
—
(7)
473
428
(23)
405
12.3
16.9
17.9
Total Medical Devices
4,443
(40)
—
4,403
3,778
—
3,778
17.5
16.4
15.4
U.S.
2,065
(38)
—
2,027
1,754
—
1,754
17.6
15.5
15.5
Intl
2,378
(2)
—
2,376
2,024
—
2,024
17.5
17.4
15.4
Vascular
677
(40)
—
637
605
—
605
12.0
5.6
4.5
U.S.
245
(38)
—
207
214
—
214
14.8
(2.5)
(2.5)
Intl
432
(2)
—
430
391
—
391
10.4
9.9
8.3
12M23
12M22
% Change vs. 12M22
Non-GAAP
Abbott Reported
Impact of CSI acquisition (a)
Impact from business exit (b)
Adjusted Revenue
Abbott Reported
Impact from business exit (b)
Adjusted Revenue
Reported
Adjusted
Organic
Total Company
40,109
(130)
(48)
39,931
43,653
(135)
43,518
(8.1)
(8.2)
(6.2)
U.S.
15,452
(123)
—
15,329
18,142
—
18,142
(14.8)
(15.5)
(15.5)
Intl
24,657
(7)
(48)
24,602
25,511
(135)
25,376
(3.3)
(3.0)
0.5
Total Nutrition
8,154
—
(48)
8,106
7,459
(135)
7,324
9.3
10.7
13.0
U.S.
3,413
—
—
3,413
2,919
—
2,919
16.9
16.9
16.9
Intl
4,741
—
(48)
4,693
4,540
(135)
4,405
4.4
6.6
10.4
Pediatric Nutrition
3,934
—
(48)
3,886
3,481
(135)
3,346
13.0
16.1
17.9
U.S.
1,977
—
—
1,977
1,562
—
1,562
26.6
26.6
26.6
Intl
1,957
—
(48)
1,909
1,919
(135)
1,784
2.0
7.1
10.3
Total Medical Devices
16,887
(130)
—
16,757
14,802
—
14,802
14.1
13.2
14.2
U.S.
7,696
(123)
—
7,573
6,681
—
6,681
15.2
13.3
13.3
Intl
9,191
(7)
—
9,184
8,121
—
8,121
13.2
13.1
14.9
Vascular
2,681
(130)
—
2,551
2,483
—
2,483
8.0
2.7
4.0
U.S.
978
(123)
—
855
864
—
864
13.2
(1.0)
(1.0)
Intl
1,703
(7)
—
1,696
1,619
—
1,619
5.2
4.7
6.7
(a) Reflects the impact of the acquisition of Cardiovascular Systems, Inc. (CSI) on April 27, 2023.
(b) Reflects the impact of exiting the pediatric nutrition business in China. This action was initiated in December 2022.
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Page 16 of 20
Abbott Laboratories and Subsidiaries
Details of Specified Items
Fourth Quarter Ended December 31, 2023
(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
$
1
$
29
$
481
$
7
$
518
R&D
(6)
(4)
—
(68)
(78)
SG&A
(15)
(5)
—
(15)
(35)
Other (income) expense, net
(6)
—
—
(3)
(9)
Earnings before taxes
$
28
$
38
$
481
$
93
640
Taxes on Earnings (d)
140
Net Earnings
$
500
Diluted Earnings per Share
$
0.28
The table above provides additional details regarding the specified items described on page 13.
a)Acquisition-related expenses include integration costs, which represent incremental costs directly related to integrating acquired businesses, as well as legal and other costs related to business acquisitions.
b)Restructuring and cost reduction initiative expenses include severance, outplacement and other direct costs associated with specific restructuring plans and cost reduction initiatives.
c)Other includes incremental costs to comply with the European Union's Medical Device Regulations (MDR) and In Vitro Diagnostics Medical Device Regulations (IVDR) requirements for previously approved products and charges for intangible asset impairments.
d)Reflects the net tax benefit associated with the specified items.
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Page 17 of 20
Abbott Laboratories and Subsidiaries
Details of Specified Items
Fourth Quarter Ended December 31, 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
$
23
$
87
$
496
$
6
$
612
R&D
(6)
(34)
—
(31)
(71)
SG&A
(7)
(135)
—
(2)
(144)
Other (income) expense, net
3
—
—
(27)
(24)
Earnings before taxes
$
33
$
256
$
496
$
66
851
Taxes on Earnings (d)
73
Net Earnings
$
778
Diluted Earnings per Share
$
0.44
The table above provides additional details regarding the specified items described on page 13.
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.
c)Other includes incremental costs to comply with the European Union's Medical Device Regulations (MDR) and In Vitro Diagnostics Medical Device Regulations (IVDR) requirements for previously approved products as well as the impairment of an equity investment.
d)Reflects the net tax benefit associated with the specified items.
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Page 18 of 20
Abbott Laboratories and Subsidiaries
Details of Specified Items
Twelve Months Ended December 31, 2023
(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
$
16
$
80
$
1,966
$
47
$
2,109
R&D
(19)
(9)
—
(194)
(222)
SG&A
(58)
(33)
—
(11)
(102)
Other (income) expense, net
40
—
—
(15)
25
Earnings before taxes
$
53
$
122
$
1,966
$
267
2,408
Taxes on Earnings (d)
329
Net Earnings
$
2,079
Diluted Earnings per Share
$
1.18
The table above provides additional details regarding the specified items described on page 14.
a)Acquisition-related expenses include legal and other costs related to business acquisitions as well as integration costs, which represent incremental costs directly related to integrating acquired businesses.
b)Restructuring and cost reduction initiative expenses include severance, outplacement and other direct costs associated with specific restructuring plans and cost reduction initiatives.
c)Other includes incremental costs to comply with the MDR and IVDR regulations for previously approved products and charges for intangible asset impairments.
d)Reflects the net tax benefit associated with the specified items.
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Page 19 of 20
Abbott Laboratories and Subsidiaries
Details of Specified Items
Twelve Months Ended December 31, 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
$
79
$
86
$
2,013
$
173
$
2,351
R&D
(16)
(38)
—
(228)
(282)
SG&A
(38)
(140)
—
(58)
(236)
Other (income) expense, net
(12)
—
—
(43)
(55)
Earnings before taxes
$
145
$
264
$
2,013
$
502
2,924
Taxes on Earnings (d)
391
Net Earnings
$
2,533
Diluted Earnings per Share
$
1.43
The table above provides additional details regarding the specified items described on page 14.
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 primarily relates to the net costs related to a voluntary recall within the Nutrition segment, charges associated with the impairments of R&D intangible assets and an equity investment acquired in a business combination, incremental costs to comply with the European Union's MDR and IVDR Regulations for previously approved products and costs related to certain litigation.
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.
