Abbott Laboratories (ABT) Q4 2022 earnings summary

Executive summary

• FY22 net sales were $43.653B, up 1.3% reported and ~6.4% organically; COVID-19 test sales and growth in medical devices and established pharmaceuticals were partly offset by nutrition headwinds.

• GAAP diluted EPS was $3.91, compared with adjusted EPS of $5.34; full-year adjusted EPS exceeded the initial forecast.

• Pandemic-era COVID testing revenue supported $2B of additional R&D and marketing investment and ~$6B in capital projects, while nearly $15B was returned to shareholders over three years.

Financial highlights

• Net sales were $43.653B vs. $43.075B in 2021; net earnings were $6.933B vs. $7.071B, and operating earnings were $8.362B vs. $8.425B.

• GAAP diluted EPS from continuing operations was $3.91 vs. $3.94; adjusted EPS was $5.34 for FY22.

• Net sales excluding COVID-19 testing revenue declined 0.3%; excluding COVID-19 testing and FX, sales rose 5.1%.

• Operating cash flow was $9.581B, down from $10.533B; capital expenditures were $1.777B vs. $1.885B.

Outlook and guidance

• COVID-19 testing demand was expected to decline significantly as the pandemic shifted toward an endemic state in 2023; the scale and timing remained uncertain.

• Inflationary pressure on raw materials, packaging and transportation was expected to continue in 2023, partly offset by selected price increases and gross-margin initiatives.

• FY23 R&D spending was targeted at ~7% of sales, with continued product development and launches across diagnostics, medical devices, nutrition and emerging-market pharmaceuticals.

• Pension contributions of ~$407M were expected in 2023; cash flow from operations was expected to continue exceeding capital expenditures and dividends.