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Abbott Reports Fourth-Quarter and Full-Year 2022 Results; Issues 2023 Financial Outlook

PRNewswire 25-Jan-2023 7:30 AM

  • Fourth-quarter sales of $10.1 billion; full-year 2022 sales of $43.7 billion
  • Full-year 2022 sales growth of 1.3 percent; organic sales growth of 6.4 percent
  • Full-year 2022 GAAP diluted EPS of $3.91; adjusted diluted EPS of $5.34
  • Continues to strengthen portfolio with steady cadence of new product approvals

ABBOTT PARK, Ill., Jan. 25, 2023 /PRNewswire/ -- Abbott (NYSE:ABT) today announced financial results for the fourth quarter ended Dec. 31, 2022.

  • Fourth-quarter sales of $10.1 billion, which were negatively impacted by an expected year-over-year decline in COVID-19 testing-related sales, decreased 12.0 percent on a reported basis and 6.1 percent on an organic basis, which excludes the impact of foreign exchange.
  • Excluding COVID-19 testing-related sales1, fourth-quarter sales decreased 1.4 percent on a reported basis and increased 5.4 percent on an organic basis.
  • Excluding COVID-19 testing-related sales2 and U.S. infant formula sales that were impacted by manufacturing disruptions3, full-year 2022 sales increased 1.9 percent on a reported basis and 7.4 percent on an organic basis.
  • GAAP diluted EPS was $0.59 in the fourth quarter. Excluding specified items, adjusted diluted EPS was $1.03.
  • Abbott issues full-year 2023 guidance for diluted EPS from continuing operations on a GAAP basis of $3.05 to $3.25 and full-year adjusted EPS from continuing operations of $4.30 to $4.50.
  • Abbott projects full-year 2023 organic sales growth, excluding COVID-19 testing-related sales, of high-single digits4 and COVID-19 testing-related sales of around $2.0 billion.
  • In October, Abbott's market-leading FreeStyle Libre® continuous glucose monitoring system was named the "Best Medical Technology" of the last 50 years by the Galien Foundation.
  • In December, Abbott announced U.S. Food and Drug Administration (FDA) approval of its Eterna™ spinal cord stimulation system — the smallest implantable, rechargeable system currently available for the treatment of chronic pain.5
  • In January, Abbott announced U.S. FDA approval of its minimally invasive Navitor™ transcatheter aortic valve implantation (TAVI) system for people with severe aortic stenosis who are at high risk for surgery.

"We significantly exceeded the EPS guidance we provided at the beginning of last year despite challenging global business conditions," said Robert B. Ford, chairman and chief executive officer, Abbott. "Our R&D pipeline continues to be highly productive with several recent and upcoming new product launches that position us well going forward."

FOURTH-QUARTER BUSINESS OVERVIEW

Note: 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. 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. 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 the underlying performance of the business in the fourth quarter ended Dec. 31, 2022 as well as in 2023 as the COVID-19 pandemic shifts to an endemic state, resulting in significantly lower expected demand for COVID-19 tests.

Total Company

($ in millions)










% Change vs. 4Q21



Sales 4Q22


Reported


Organic



U.S.


Int'l


Total


U.S.


Int'l


Total


U.S.


Int'l


Total

Total 6


4,219


5,872


10,091


(13.1)


(11.2)


(12.0)


(13.1)


(0.9)


(6.1)

Nutrition


795


1,022


1,817


(14.4)


(8.3)


(11.1)


(14.4)


1.4


(5.7)

Diagnostics


1,695


1,610


3,305


(29.0)


(22.8)


(26.1)


(29.0)


(12.5)


(21.3)

Established Pharmaceuticals



1,216


1,216


n/a


1.0


1.0


n/a


7.9


7.9

Medical Devices


1,726


2,024


3,750


12.2


(8.4)



12.2


4.1


7.4















































% Change vs. 12M21



Sales 12M22


Reported


Organic



U.S.


Int'l


Total


U.S.


Int'l


Total


U.S.


Int'l


Total

Total 6


18,142


25,511


43,653


9.0


(3.5)


1.3


9.0


4.7


6.4

Nutrition


2,919


4,540


7,459


(17.9)


(4.2)


(10.1)


(17.9)


2.5


(6.2)

Diagnostics


8,646


7,938


16,584


21.3


(6.8)


6.0


21.3


1.3


10.4

Established Pharmaceuticals



4,912


4,912


n/a


4.1


4.1


n/a


10.6


10.6

Medical Devices


6,566


8,121


14,687


10.9


(3.8)


2.2


10.9


6.2


8.1


n/a = Not Applicable.

 

Worldwide COVID-19 testing-related sales were $1.069 billion in the fourth quarter of 2022 compared to $2.319 billion in the fourth quarter of the prior year. Worldwide COVID-19 testing-related sales were $8.368 billion in the full year of 2022 compared to $7.679 billion in the prior year.

The following tables summarize sales excluding COVID-19 testing-related sales and the change in reported and organic sales excluding COVID-19 testing-related sales in 2022 versus the prior year2









% Change vs. 4Q21



Sales excl. COVID tests 4Q22


Reported excl. COVID tests


Organic excl. COVID tests



U.S.


Int'l


Total


U.S.


Int'l


Total


U.S.


Int'l


Total

Total 1


3,443


5,579


9,022


5.8


(5.4)


(1.4)


5.8


5.3


5.4

Diagnostics


919


1,317


2,236


16.8


(3.6)


3.8


16.8


8.0


11.2




























% Change vs. 12M21



Sales excl. COVID tests 12M22


Reported excl. COVID tests


Organic excl. COVID tests



U.S.


Int'l


Total


U.S.


Int'l


Total


U.S.


Int'l


Total

Total


12,644


22,641


35,285


2.5


(1.8)


(0.3)


2.5


6.5


5.1

Diagnostics


3,148


5,068


8,216


11.4


(1.4)


3.1


11.4


7.1


8.6





Nutrition

($ in millions)










% Change vs. 4Q21



Sales 4Q22


Reported


Organic



U.S.


Int'l


Total


U.S.


Int'l


Total


U.S.


Int'l


Total

Total


795


1,022


1,817


(14.4)


(8.3)


(11.1)


(14.4)


1.4


(5.7)

Pediatric


454


428


882


(20.4)


(8.9)


(15.2)


(20.4)


(1.2)


(11.8)

Adult


341


594


935


(4.8)


(7.9)


(6.8)


(4.8)


3.4


0.5




























% Change vs. 12M21



Sales 12M22


Reported


Organic



U.S.


Int'l


Total


U.S.


Int'l


Total


U.S.


Int'l


Total

Total


2,919


4,540


7,459


(17.9)


(4.2)


(10.1)


(17.9)


2.5


(6.2)

Pediatric


1,562


1,919


3,481


(28.7)


(8.9)


(19.0)


(28.7)


(3.9)


(16.6)

Adult


1,357


2,621


3,978


(0.5)


(0.4)


(0.4)


(0.5)


7.6


4.8

 

Worldwide Nutrition sales decreased 11.1 percent on a reported basis and 5.7 percent on an organic basis in the fourth quarter. Total worldwide Nutrition and Pediatric Nutrition sales were negatively impacted as a result of manufacturing disruptions during 2022 of certain infant formula products3 at Abbott's Sturgis, Michigan, facility. The manufacturing facility has subsequently restarted production.

In Adult Nutrition, global sales decreased 6.8 percent on a reported basis and increased 0.5 percent on an organic basis in the fourth quarter, led by Ensure®, Abbott's market-leading complete and balanced nutrition brand.

Diagnostics

($ in millions)










% Change vs. 4Q21



Sales 4Q22


Reported


Organic



U.S.


Int'l


Total


U.S.


Int'l


Total


U.S.


Int'l


Total

Total


1,695


1,610


3,305


(29.0)


(22.8)


(26.1)


(29.0)


(12.5)


(21.3)

Core Laboratory


301


963


1,264


0.2


(8.1)


(6.3)


0.2


3.5


2.8

Molecular


62


118


180


(54.2)


(43.9)


(47.9)


(54.2)


(38.6)


(44.7)

Point of Care


88


43


131


(7.6)


7.0


(3.3)


(7.6)


14.4


(1.2)

Rapid Diagnostics


1,244


486


1,730


(33.0)


(38.2)


(34.5)


(33.0)


(28.3)


(31.6)




























% Change vs. 12M21



Sales 12M22


Reported


Organic



U.S.


Int'l


Total


U.S.


Int'l


Total


U.S.


Int'l


Total

Total


8,646


7,938


16,584


21.3


(6.8)


6.0


21.3


1.3


10.4

Core Laboratory


1,137


3,751


4,888


(0.7)


(5.8)


(4.7)


(0.7)


2.7


1.9

Molecular


370


625


995


(34.6)


(27.4)


(30.3)


(34.6)


(22.6)


(27.4)

Point of Care


372


153


525


(3.2)


0.8


(2.1)


(3.2)


6.0


(0.6)

Rapid Diagnostics


6,767


3,409


10,176


34.4


(3.1)


19.0


34.4


5.4


22.5

 

As expected, Diagnostics sales in the fourth quarter were negatively impacted by year-over-year declines in COVID-19 testing-related sales. Worldwide COVID-19 testing-related sales were $1.069 billion in the fourth quarter of 2022 compared to $2.319 billion in the fourth quarter of the prior year.

The following tables summarize sales excluding COVID-19 testing-related sales and the change in reported and organic sales excluding COVID-19 testing-related sales in 2022 versus the prior year2:









% Change vs. 4Q21



Sales excl. COVID tests 4Q22


Reported excl. COVID tests


Organic excl. COVID tests



U.S.


Int'l


Total


U.S.


Int'l


Total


U.S.


Int'l


Total

Total


919


1,317


2,236


16.8


(3.6)


3.8


16.8


8.0


11.2

Core Laboratory


298


956


1,254


1.5


(5.3)


(3.8)


1.5


6.8


5.6

Molecular


45


98


143


(0.2)


(8.3)


(5.9)


(0.2)


(0.4)


(0.3)

Point of Care


88


43


131


(7.6)


7.0


(3.3)


(7.6)


14.4


(1.2)

Rapid Diagnostics


488


220


708


38.3


4.6


25.7


38.3


16.8


30.3




























% Change vs. 12M21



Sales excl. COVID tests 12M22


Reported excl. COVID tests


Organic excl. COVID tests



U.S.


Int'l


Total


U.S.


Int'l


Total


U.S.


Int'l


Total

Total


3,148


5,068


8,216


11.4


(1.4)


3.1


11.4


7.1


8.6

Core Laboratory


1,121


3,705


4,826


1.3


(2.9)


(2.0)


1.3


5.8


4.8

Molecular


180


404


584


11.4


8.0


9.0


11.4


14.8


13.8

Point of Care


372


153


525


(3.2)


0.8


(2.1)


(3.2)


6.0


(0.6)

Rapid Diagnostics


1,475


806


2,281


25.6


1.3


15.8


25.6


9.4


19.1





Established Pharmaceuticals

($ in millions)










% Change vs. 4Q21



Sales 4Q22


Reported


Organic



U.S.


Int'l


Total


U.S.


Int'l


Total


U.S.


Int'l


Total

Total



1,216


1,216


n/a


1.0


1.0


n/a


7.9


7.9

Key Emerging Markets



902


902


n/a


3.9


3.9


n/a


10.3


10.3

Other



314


314


n/a


(6.5)


(6.5)


n/a


1.9


1.9




























% Change vs. 12M21



Sales 12M22


Reported


Organic



U.S.


Int'l


Total


U.S.


Int'l


Total


U.S.


Int'l


Total

Total



4,912


4,912


n/a


4.1


4.1


n/a


10.6


10.6

Key Emerging Markets



3,728


3,728


n/a


5.4


5.4


n/a


11.8


11.8

Other



1,184


1,184


n/a


0.4


0.4


n/a


7.3


7.3

 

Established Pharmaceuticals sales increased 1.0 percent on a reported basis and 7.9 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 3.9 percent on a reported basis and 10.3 percent on an organic basis, led by strong growth in several geographies including India, China, Brazil and Mexico, and across several therapeutic areas, including cardiometabolic, women's health and central nervous system/pain management.

Medical Devices

($ in millions)










% Change vs. 4Q21



Sales 4Q22


Reported


Organic



U.S.


Int'l


Total


U.S.


Int'l


Total


U.S.


Int'l


Total

Total


1,726


2,024


3,750


12.2


(8.4)



12.2


4.1


7.4

Rhythm Management


254


260


514


5.2


(13.3)


(5.0)


5.2


(0.5)


2.1

Electrophysiology


242


245


487


22.7


(19.8)


(3.1)


22.7


(6.6)


4.9

Heart Failure


171


59


230


0.1


(13.9)


(3.9)


0.1


(4.5)


(1.2)

Vascular


214


391


605


(7.5)


(12.5)


(10.8)


(7.5)


(1.4)


(3.5)

Structural Heart


214


227


441


10.9


0.4


5.2


10.9


15.7


13.5

Neuromodulation


163


39


202


3.7


(3.1)


2.3


3.7


11.7


5.3

Diabetes Care


468


803


1,271


34.9


(2.5)


8.6


34.9


9.8


17.3




























% Change vs. 12M21



Sales 12M22


Reported


Organic



U.S.


Int'l


Total


U.S.


Int'l


Total


U.S.


Int'l


Total

Total


6,566


8,121


14,687


10.9


(3.8)


2.2


10.9


6.2


8.1

Rhythm Management


1,029


1,090


2,119


1.1


(7.7)


(3.6)


1.1


1.9


1.5

Electrophysiology


909


1,018


1,927


17.0


(9.9)


1.1


17.0


0.7


7.3

Heart Failure


694


226


920


6.2


(4.0)


3.5


6.2


5.2


5.9

Vascular


864


1,619


2,483


(5.6)


(6.9)


(6.4)


(5.6)


1.5


(1.0)

Structural Heart


818


894


1,712


12.0


1.6


6.3


12.0


13.8


13.0

Neuromodulation


619


151


770


0.3


(8.1)


(1.4)


0.3


2.9


0.9

Diabetes Care


1,633


3,123


4,756


34.8


0.2


9.9


34.8


10.6


17.4

 

Worldwide Medical Devices sales were flat on a reported basis and increased 7.4 percent on an organic basis in the fourth quarter. Sales growth in the U.S. was led by strong double-digit growth in Electrophysiology, Structural Heart and Diabetes Care. Internationally, sales growth was negatively impacted by intermittent COVID-19 lockdown restrictions in China as well as supply constraints in certain areas, including Electrophysiology and Diabetes Care.

In Diabetes Care, FreeStyle Libre sales were approximately $1.1 billion in the quarter, including U.S. growth of more than 40 percent.

In 2022, Abbott continued to strengthen its Medical Devices portfolio with several recent pipeline advancements, including U.S. FDA approvals of:

  • Navitor, Abbott's latest-generation transcatheter aortic valve implantation (TAVI) system, used for the treatment of severe aortic stenosis.
  • Eterna, Abbott's rechargeable spinal cord stimulator used for treating chronic pain.
  • Aveir™ leadless pacemaker, used for treating patients with slow heart rhythms.
  • An expanded indication of use for CardioMEMS™ HF remote monitoring system, which detects early warning signs of worsening heart failure.
  • U.S. FDA clearance of the FreeStyle Libre 3 system, which provides continuous glucose readings and unsurpassed 14-day accuracy7 in the world's smallest and thinnest7 wearable sensor.

ABBOTT'S EARNINGS-PER-SHARE GUIDANCE

Abbott projects full-year 2023 diluted earnings per share from continuing operations under GAAP of $3.05 to $3.25. Abbott forecasts specified items for the full-year 2023 of $1.25 per share primarily related to intangible amortization, restructuring and cost reduction initiatives and other net expenses. Excluding specified items, projected adjusted diluted earnings per share from continuing operations would be $4.30 to $4.50 for the full-year 2023.

ABBOTT DECLARES 396TH CONSECUTIVE QUARTERLY DIVIDEND

On Dec. 9, 2022, the board of directors of Abbott declared the company's quarterly dividend of $0.51 per share. Abbott's cash dividend is payable Feb. 15, 2023, to shareholders of record at the close of business on Jan. 13, 2023.

Abbott has increased its dividend payout for 51 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 115,000 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.

— 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

In the fourth quarter of 2022, COVID-19 testing-related sales were $1.069 billion. In the fourth quarter of 2021, total worldwide sales were $11.468 billion, which included U.S. sales of $4.855 billion and International sales of $6.613 billion. In the fourth quarter of 2021, COVID-19 testing-related sales were $2.319 billion.

2

For the full-year 2022, COVID-19 testing-related sales were $8.368 billion. In 2021, total worldwide sales were $43.075 billion, which included U.S. sales of $16.642 billion and International sales of $26.433 billion. For the full-year 2021, COVID-19 testing-related sales were $7.679 billion. Diagnostic sales and COVID-19 testing-related sales in 2022 and 2021 are summarized below:

 



Sales 4Q22



COVID Tests Sales 4Q22



U.S.


Int'l


Total



U.S.


Int'l


Total

Total Diagnostics


1,695


1,610


3,305



776


293


1,069

Core Laboratory


301


963


1,264



3


7


10

Molecular


62


118


180



17


20


37

Rapid Diagnostics


1,244


486


1,730



756


266


1,022

 



Sales 4Q21



COVID Tests Sales 4Q21



U.S.


Int'l


Total



U.S.


Int'l


Total

Total Diagnostics


2,386


2,085


4,471



1,600


719


2,319

Core Laboratory


300


1,048


1,348



7


39


46

Molecular


135


210


345



89


103


192

Rapid Diagnostics


1,856


787


2,643



1,504


577


2,081

 



Sales 12M22



COVID Tests Sales 12M22



U.S.


Int'l


Total



U.S.


Int'l


Total

Total Diagnostics


8,646


7,938


16,584



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


6,767


3,409


10,176



5,292


2,603


7,895

 



Sales 12M21



COVID Tests Sales 12M21



U.S.


Int'l


Total



U.S.


Int'l


Total

Total Diagnostics


7,129


8,515


15,644



4,302


3,377


7,679

Core Laboratory


1,145


3,983


5,128



37


167


204

Molecular


566


861


1,427



405


487


892

Rapid Diagnostics


5,034


3,519


8,553



3,860


2,723


6,583



3

U.S. sales of certain infant formula products impacted by the 2022 manufacturing disruptions were $202 million in 4Q22 and $329 million in 4Q21 and $479 million for the full-year 2022 and $1.229 billion for the full-year 2021. Excluding COVID-19 testing-related sales and U.S. infant formula sales that were impacted by manufacturing disruptions, fourth-quarter sales were flat on a reported basis and increased 7.1 percent on an organic basis.

4

Abbott has not provided the 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 the impact of foreign exchange due to the unpredictability of future changes in foreign exchange rates, which could significantly impact reported sales growth.

5

Abbott. Eterna SCS IPG Size Comparison Memo (MAT-2210151); 2022.

6

Total Abbott sales include Other Sales of approximately $3 million in 4Q22 and approximately $11 million in 12M22.

7

Data on file, Abbott Diabetes Care. Comparison based on publicly available information.

 

Abbott Laboratories and Subsidiaries

Condensed Consolidated Statement of Earnings

Fourth Quarter Ended December 31, 2022 and 2021

(in millions, except per share data)

(unaudited)



4Q22


4Q21


% Change


Net Sales

$10,091


$11,468


(12.0)









Cost of products sold, excluding amortization expense

4,593


4,766


(3.6)


Amortization of intangible assets

496


514


(3.7)


Research and development

725


762


(4.8)


Selling, general, and administrative

2,973


3,048


(2.5)


Total Operating Cost and Expenses

8,787


9,090


(3.3)









Operating Earnings

1,304


2,378


(45.2)









Interest expense, net

66


120


(45.2)


Net foreign exchange (gain) loss

(14)


(6)


n/m


Other (income) expense, net

(68)


(63)


8.1


Earnings before taxes

1,320


2,327


(43.3)


Taxes on earnings

287


338


(15.2)

1)








Net Earnings

$1,033


$1,989


(48.1)









Net Earnings excluding Specified Items, as described below

$1,811


$2,366


(23.4)

2)








Diluted Earnings per Common Share

$0.59


$1.11


(46.8)









Diluted Earnings per Common Share,

excluding Specified Items, as described below

$1.03


$1.32


(22.0)

2)








Average Number of Common Shares Outstanding

Plus Dilutive Common Stock Options

1,754


1,782





NOTES:

See table titled "Non-GAAP Reconciliation of Financial Information" for additional details regarding specified items.

n/m = Percent change is not meaningful.

See footnotes on the following below.



1)

2021 Taxes on Earnings includes the recognition of approximately $40 million of net tax benefits as a result of the resolution of various tax positions related to prior years and approximately $45 million in excess tax benefits associated with share-based compensation.

2)

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.


2021 Net Earnings and Diluted Earnings per Common Share from Continuing Operations, excluding Specified Items, excludes net after-tax charges of $377 million, or $0.21 per share, for intangible amortization and other expenses primarily associated with restructuring actions and acquisitions, partially offset by a change in estimate to the restructuring actions recognized in the second quarter of 2021 related to Abbott's manufacturing network for COVID-19 diagnostic tests to reflect current and projected demand.

 

Abbott Laboratories and Subsidiaries

Condensed Consolidated Statement of Earnings

Twelve Months Ended December 31, 2022 and 2021

(in millions, except per share data)

(unaudited)



12M22


12M21


% Change


Net Sales

$43,653


$43,075


1.3









Cost of products sold, excluding amortization expense

19,142


18,537


3.3


Amortization of intangible assets

2,013


2,047


(1.7)


Research and development

2,888


2,742


5.3


Selling, general, and administrative

11,248


11,324


(0.7)


Total Operating Cost and Expenses

35,291


34,650


1.8









Operating Earnings

8,362


8,425


(0.7)









Interest expense, net

375


490


(23.4)


Net foreign exchange (gain) loss

2


1


n/m


Other (income) expense, net

(321)


(277)


16.0


Earnings before taxes

8,306


8,211


1.2


Taxes on earnings

1,373


1,140


20.5

1)








Net Earnings

$6,933


$7,071


(2.0)









Net Earnings excluding Specified Items, as described below

$9,466


$9,367


1.1

2)








Diluted Earnings per Common Share

$3.91


$3.94


(0.8)









Diluted Earnings per Common Share,

excluding Specified Items, as described below

$5.34


$5.21


2.5

2)








Average Number of Common Shares Outstanding

Plus Dilutive Common Stock Options

1,764


1,789





NOTES:

See table titled "Non-GAAP Reconciliation of Financial Information" for additional details regarding specified items.

n/m = Percent change is not meaningful.

See footnotes on the following below.



1)

2022 Taxes on Earnings includes the recognition of approximately $20 million of net tax expense as a result of the resolution of various tax positions related to prior years and approximately $43 million in excess tax benefits associated with share-based compensation.


2021 Taxes on Earnings includes the recognition of approximately $55 million of net tax benefits as a result of the resolution of various tax positions related to prior years and approximately $145 million in excess tax benefits associated with share-based compensation.

2)

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.


2021 Net Earnings and Diluted Earnings per Common Share from Continuing Operations, excluding Specified Items, excludes net after-tax charges of $2.296 billion, or $1.27 per share, for intangible amortization and other net expenses primarily associated with restructuring actions, certain litigation and acquisitions.

 

Abbott Laboratories and Subsidiaries

Non-GAAP Reconciliation of Financial Information

Fourth Quarter Ended December 31, 2022 and 2021

(in millions, except per share data)

(unaudited)



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 table titled "Non-GAAP Reconciliation of Financial Information" for additional details regarding specified items.



4Q21


As

Reported (GAAP)


Specified Items


As

Adjusted







Intangible Amortization

$           514


$         (514)


$             —

Gross Margin

6,188


434


6,622

R&D

762


(39)


723

SG&A

3,048


(43)


3,005

Other (income) expense, net

(63)


(5)


(68)

Earnings before taxes

2,327


521


2,848

Taxes on Earnings

338


144


482

Net Earnings

1,989


377


2,366

Diluted Earnings per Share

$         1.11


$         0.21


$         1.32

 

Specified items reflect intangible amortization expense of $514 million and other net expenses of $7 million that includes costs associated with acquisitions and other expenses, partially offset by a change in estimate to the restructuring actions recognized in the second quarter of 2021. See tables titled "A reconciliation of the fourth-quarter tax rates for 2022 and 2021" for additional details regarding specified items.

 

Abbott Laboratories and Subsidiaries

Non-GAAP Reconciliation of Financial Information

Twelve Months Ended December 31, 2022 and 2021

(in millions, except per share data)

(unaudited)



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 tables titled "Details of Specified Items" for additional details regarding specified items.

 


12M21


As

Reported (GAAP)


Specified Items


As

Adjusted







Intangible Amortization

$       2,047


$     (2,047)


$             —

Gross Margin

22,491


2,476


24,967

R&D

2,742


(106)


2,636

SG&A

11,324


(317)


11,007

Other (income) expense, net

(277)


25


(252)

Earnings before taxes

8,211


2,874


11,085

Taxes on Earnings

1,140


578


1,718

Net Earnings

7,071


2,296


9,367

Diluted Earnings per Share

$         3.94


$         1.27


$         5.21

 

Specified items reflect intangible amortization expense of $2.047 billion and other net expenses of $827 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 fourth-quarter tax rates for 2022 and 2021 is shown below:





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 %










4Q21


($ in millions)

Pre-Tax

Income


Taxes on

Earnings


Tax

Rate


As reported (GAAP)

$       2,327


$           338


14.5 %

1)

Specified items

521


144




Excluding specified items

$       2,848


$           482


16.9 %




1)

2021 Taxes on Earnings includes the recognition of approximately $40 million of net tax benefits as a result of the resolution of various tax positions related to prior years and approximately $45 million in excess tax benefits associated with share-based compensation.

 

A reconciliation of the year-to-date tax rates for 2022 and 2021 is shown below:



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 %



12M21


($ in millions)

Pre-Tax

Income


Taxes on

Earnings


Tax

Rate


As reported (GAAP)

$       8,211


$       1,140


13.9 %

3)

Specified items

2,874


578




Excluding specified items

$     11,085


$       1,718


15.5 %




2)

2022 Taxes on Earnings includes the recognition of approximately $20 million of net tax expense as a result of the resolution of various tax positions related to prior years and approximately $43 million in excess tax benefits associated with share-based compensation.

3)

2021 Taxes on Earnings includes the recognition of approximately $55 million of net tax benefits as a result of the resolution of various tax positions related to prior years and approximately $145 million in excess tax benefits associated with share-based compensation.

 

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 table titled "Condensed Consolidated Statement of Earnings."

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.

 

Abbott Laboratories and Subsidiaries

Details of Specified Items

Fourth Quarter Ended December 31, 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


$                 26


$             (110)


$               514


$                   4


$               434

R&D


(6)


(8)



(25)


(39)

SG&A


(12)


(23)



(8)


(43)

Other (income) expense, net


(2)




(3)


(5)

Earnings before taxes


$                 46


$               (79)


$               514


$                 40


521

Taxes on Earnings (d)










144

Net Earnings










$               377

Diluted Earnings per Share










$              0.21

 

The table above provides additional details regarding the specified items described on titled "Condensed Consolidated Statement of Earnings."

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 a credit associated with a change in estimate to the charges taken in the second quarter of 2021 for a restructuring plan related to Abbott's manufacturing network for COVID-19 diagnostic tests to reflect current and projected demand.

c)

Other includes incremental costs to comply with the European Union's MDR and IVDR requirements 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 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 table titled "Condensed Consolidated Statement of Earnings."

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.

 

Abbott Laboratories and Subsidiaries

Details of Specified Items

Twelve Months Ended December 31, 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

$                 82


$               323


$            2,047


$                 24


$            2,476

R&D

(15)


(7)



(84)


(106)

SG&A

(55)


(45)



(217)


(317)

Other (income) expense, net

1


1



23


25

Earnings before taxes

$               151


$               374


$            2,047


$               302


2,874

Taxes on Earnings (d)









578

Net Earnings









$            2,296

Diluted Earnings per Share









$              1.27

  

The table above provides additional details regarding the specified items described on table titled "Condensed Consolidated Statement of Earnings."

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 year in current and 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. 

 

Cision View original content:https://www.prnewswire.com/news-releases/abbott-reports-fourth-quarter-and-full-year-2022-results-issues-2023-financial-outlook-301730346.html

SOURCE Abbott