Abbott's soaring FreeStyle Libre sales temper COVID testing drop-off in 2022 results

Despite the flood of apocalyptic warnings from COVID-19 testmakers who kicked off 2022 with stark predictions of dwindling diagnostic sales and, therefore, major hits to their year-over-year results, Abbott, for one, has defied the odds.

Last year, the medtech giant racked up COVID-related sales of nearly $8.4 billion—a surprising 9% increase over 2021’s $7.7 billion haul and more than quadruple its estimates from the start of 2022, when Abbott predicted that it would take in only $2 billion in COVID test sales—according to its full-year financial report, published Wednesday.

That said, Abbott did experience a steep drop in COVID test sales in the final months of 2022, when it took in around $1.1 billion in sales from the segment, less than half of the $2.3 billion it clocked for the fourth quarter the previous year.

With the new year underway, the company is once again predicting a severe reduction in its annual COVID testing earnings—though that forecast may actually hold true this time around, if last quarter’s results are anything to go by. For 2023, Abbott is expecting to take in around $2 billion in COVID-related sales, less than a quarter of last year’s total.

Thanks in large part to the drop-off in COVID-related sales, Abbott registered a 12% decrease in its total fourth-quarter sales compared to 2021. Without factoring in COVID testing, the company said the quarterly decrease would shrink to just 1.4%.

Also denting the results was the steady-but-slow revival of its nutrition department, which registered an 11% year-over-year decrease for the fourth quarter of the year and includes the company’s beleaguered baby formula products. Following a whistleblower complaint and FDA investigation, Abbott began a major recall of several of its formula products in early 2022 and shut down operations at one of its main manufacturing facilities; production resumed in July, but was unable to return to previous output levels by the end of the year.

Somewhat softening that blow, however, was a healthy increase in Abbott’s diabetes device department. The company’s FreeStyle Libre continuous glucose monitors raked in $1.1 billion for the quarter—helped along by sales growth of more than 40% in the U.S., according to the earnings report.

With those strong device sales and the full-year jump in COVID test sales—and despite the year’s 60% decline in sales of baby formula products affected by the manufacturing stoppage—Abbott was able to scrape out a small win in its overall 2022 earnings. In total, it earned $43.7 billion in sales for the year, 1.3% higher than 2021’s take. Ignoring COVID and formula sales, the year-over-year increase would’ve reportedly reached 1.9%.

The company also outperformed its own estimates for the year. At the start of 2022, Abbott said it was expecting to report earnings per share from continuing operations of at least $4.70, but in fact, according to Wednesday’s report, its adjusted diluted EPS reached $5.34 for the full year.

With the predicted shrinking of COVID test sales, however, Abbott is now expecting to see that number fall in 2023: It’s forecasting full-year adjusted EPS from continuing operations of $4.30 to $4.50.