Demand for COVID-19 tests powers Abbott's forecast above estimate

Abbott Laboratories forecast full-year profit above Wall Street estimates on Thursday as the company benefits from a surge in demand for its coronavirus tests.

Since March, the company has won US authorization for five coronavirus tests, including one that can deliver results within minutes and is used at the White House, shielding it from a slide in demand for its medical devices and helping it beat second-quarter profit estimate.

The company forecast adjusted earnings of at least $3.25 per share for the year after suspending its outlook in April due to uncertainties over the outbreak. Analysts on average were estimating $2.87 per share, according to Refinitiv IBES data.

Abbott must be feeling very good about some of the diagnostics tailwinds to sustain into second half of the year to put a floor on earnings per share given the uncertainty around a second wave of infections and Medtech procedure volume trends, said Evercore ISI analyst Vijay Kumar.

Peer Quest Diagnostics Inc said earlier this week its second-quarter revenue would top analysts' estimates, largely due to growing demand for its COVID-19 tests.

Worldwide sales of Abbott's medical devices slumped 21.2% in the second quarter due to reduced heart and brain surgeries during the pandemic, but the company said procedure volumes improved significantly over the course of the quarter.

The diagnostics unit, which also houses its COVID-19 test kits, reported a 4.7% jump in revenue to $1.99 billion, helped by $615 million in sales of the tests.

Excluding items, the company earned 57 cents per share, beating consensus of 42 cents.

Net sales fell 8.2% to $7.33 billion, but came above estimates of $6.81 billion.