Abbott Laboratories (ABT) Q4 2018 earnings summary

Executive summary

• FY18 sales reached $30.6B, up 11.6% GAAP and 7.3% organically; adjusted diluted EPS was $2.88, up 15.2%.

• All four major businesses delivered strong organic growth; over 50% of sales came from products and businesses added in the prior six years.

• International markets generated ~65% of sales; operations spanned more than 160 countries.

Financial highlights

• FY18 net sales were $30.578B vs. $27.390B; operating earnings were $3.650B vs. $1.564B.

• Net earnings were $2.368B and continuing-operations earnings were $2.334B; diluted EPS was $1.33 reported and $1.31 from continuing operations.

• Q4 sales were $7.765B vs. $7.589B YoY; continuing-operations earnings were $655M vs. a loss of $864M, and diluted continuing-operations EPS was $0.37 vs. $(0.50).

• Operating cash flow was $6.3B vs. $5.6B; capital expenditures were $1.394B vs. $1.135B.

Outlook and guidance

• FY19 R&D spending was expected to approximate 7.5% of sales; 2019 focus included product development and continued investment in sustainable growth areas.

• Priorities included Alinity adoption and geographic expansion, cardiovascular and neuromodulation growth, global nutrition launches, emerging-market pharmaceuticals, and FreeStyle Libre adoption.

• Expected 2019 pension contributions were ~$380M; operating cash flow was expected to continue exceeding capital expenditures and dividends.