8-K
Abbott Laboratories (ABT)
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
_______________________________________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
April 17, 2024
Date of Report (Date of earliest event reported)
ABBOTT LABORATORIES
(Exact name of registrant as specified in charter)
_______________________________________________________
| Illinois | 1-2189 | 36-0698440 |
|---|---|---|
| (State or other Jurisdiction <br>of Incorporation) | (Commission File Number) | (IRS Employer <br>Identification No.) |
_______________________________________________________
100 Abbott Park Road
Abbott Park, Illinois 60064-6400
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (224) 667-6100
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities Registered Pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading<br><br>Symbol(s) | Name of Each Exchange<br><br>on Which Registered |
|---|---|---|
| Common Shares, Without Par Value | ABT | New York Stock Exchange<br><br>Chicago Stock Exchange, Inc. |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Item 2.02 Results of Operations and Financial Condition
On April 17, 2024, Abbott Laboratories announced its results of operations for the first quarter 2024.
Furnished as Exhibit 99.1, and incorporated herein by reference, is the news release issued by Abbott announcing those results. In that news release, Abbott uses various non-GAAP financial measures including, among others, net earnings excluding specified items. These non-GAAP financial measures adjust for factors that are unusual or unpredictable, such as expenses primarily associated with acquisitions, restructuring actions, cost reduction initiatives, fair value adjustments to the contingent consideration related to business acquisitions, impairment charges related to intangible assets or equity investments, certain regulatory costs, tax benefits associated with specified items, net tax expense as a result of the resolution of various tax positions related to prior years, and excess tax benefits associated with share-based compensation. These non-GAAP financial measures also exclude intangible amortization expense to provide greater visibility on the results of operations excluding these costs, similar to how Abbott’s management internally assesses performance. Abbott’s management believes the presentation of these non-GAAP financial measures provides useful information to investors regarding Abbott’s results of operations as these non-GAAP financial measures allow investors to better evaluate ongoing business performance. Abbott’s management also uses these non-GAAP financial measures internally to monitor performance of the businesses. Abbott, however, cautions investors to consider these non-GAAP financial measures in addition to, and not as a substitute for, financial measures prepared in accordance with GAAP.
Item 9.01 Financial Statements and Exhibits
| Exhibit No. | Exhibit |
|---|---|
| 99.1 | Press Release dated April 17, 2024 (furnished pursuant to Item 2.02). |
| 104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded in the Inline XBRL document). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ABBOTT LABORATORIES | ||
|---|---|---|
| Date: April 17, 2024 | By: | /s/ Philip P. Boudreau |
| Philip P. Boudreau | ||
| Senior Vice President, Finance and Chief Financial Officer |
Document
Exhibit 99.1
| News Release |
|---|
Abbott Reports First-Quarter 2024 Results and Raises Midpoint of Full-Year Guidance Ranges
–Sales of $10.0 billion driven by strong underlying base business performance
–Reported sales increased 2.2 percent, which includes the impact from the anticipated decline in COVID-19 testing-related sales versus prior year
–Organic sales growth for underlying base business of 10.8 percent, which represents the fifth consecutive quarter of double-digit growth1
ABBOTT PARK, Ill., April 17, 2024 — Abbott today announced financial results for the first quarter ended March 31, 2024.
•First-quarter GAAP diluted EPS of $0.70 and adjusted diluted EPS of $0.98, which excludes specified items.
•Abbott narrowed its full-year 2024 EPS guidance range. Abbott projects full-year diluted EPS on a GAAP basis of $3.25 to $3.40 and projects adjusted diluted EPS of $4.55 to $4.70, which represents an increase at the midpoint of the range.
•Abbott narrowed its full-year 2024 organic sales growth guidance range, excluding COVID-19 testing-related sales, to 8.5% to 10.0%, which represents an increase at the midpoint of the range2.
•In January, Abbott launched the Protality™ brand, a new high-protein nutrition shake to support the growing number of adults interested in pursuing weight loss while maintaining muscle mass.
•In February, Insulet's Omnipod® 5 Automated Insulin Delivery System received CE Mark approval to be offered as an integrated solution with Abbott's FreeStyle Libre® 2 Plus sensor for treating diabetes.
•In March, Abbott completed enrollment in the company's Volt CE Mark clinical study, which is designed to evaluate the Volt™ Pulsed Field Ablation (PFA) System for treating patients with heart rhythm disorders such as atrial fibrillation (AFib). Enrollment in the company's VOLT-AF IDE clinical study was initiated in April.
•In April, Abbott announced U.S. Food and Drug Administration (FDA) approval of TriClip™, a first-of-its-kind, minimally invasive treatment option for patients with tricuspid regurgitation, or a leaky tricuspid heart valve.
•In April, Abbott announced FDA approval of the i-STAT® TBI test, which helps assess a suspected traumatic brain injury (TBI) or concussion in just 15 minutes. This new test can be performed outside of traditional hospital settings, making it more accessible and convenient for patients.
"Our first-quarter results reflect a strong start to the year, and we are raising our full-year sales and EPS guidance," said Robert B. Ford, chairman and chief executive officer, Abbott. "This was the fifth consecutive quarter that we delivered double-digit organic sales growth in our underlying base business, which included particularly strong results in Medical Devices and Established Pharmaceuticals."
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FIRST-QUARTER BUSINESS OVERVIEW
Management believes that measuring sales growth rates on an organic basis, which excludes the impact of foreign exchange, and the impact of the acquisition of Cardiovascular Systems, Inc. (CSI), is an appropriate way for investors to best understand the core underlying performance of the business. 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 underlying base business performance as the COVID-19 pandemic has shifted to an endemic state, resulting in significantly lower demand for COVID-19 tests.
Note: 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.
Total Company
First Quarter 2024 Results (1Q24)
| Sales 1Q24 ($ in millions) | Total Company | Nutrition | Diagnostics | Established Pharmaceuticals | Medical Devices |
|---|---|---|---|---|---|
| U.S. | 3,846 | 878 | 931 | — | 2,034 |
| International | 6,118 | 1,190 | 1,283 | 1,226 | 2,419 |
| Total reported | 9,964 | 2,068 | 2,214 | 1,226 | 4,453 |
| % Change vs. 1Q23 | |||||
| --- | --- | --- | --- | --- | --- |
| U.S. | (2.1) | 8.1 | (30.3) | n/a | 14.4 |
| International | 5.2 | 3.0 | (5.1) | 3.1 | 14.0 |
| Total reported | 2.2 | 5.1 | (17.6) | 3.1 | 14.2 |
| Impact of foreign exchange | (2.9) | (2.6) | (2.1) | (10.6) | (1.2) |
| Impact of CSI acquisition | 0.4 | — | — | — | 1.1 |
| Organic | 4.7 | 7.7 | (15.5) | 13.7 | 14.3 |
| Impact of COVID-19 testing sales | (6.1) | — | (20.9) | — | — |
| Organic (excluding COVID-19 tests) | 10.8 | 7.7 | 5.4 | 13.7 | 14.3 |
| U.S. | 10.0 | 8.1 | 7.0 | n/a | 12.1 |
| International | 11.3 | 7.4 | 4.4 | 13.7 | 16.1 |
Refer to page 13 for a reconciliation of adjusted historical revenue to reported revenue.
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Nutrition
First Quarter 2024 Results (1Q24)
| Sales 1Q24 ($ in millions) | Total | Pediatric | Adult |
|---|---|---|---|
| U.S. | 878 | 514 | 364 |
| International | 1,190 | 495 | 695 |
| Total reported | 2,068 | 1,009 | 1,059 |
| % Change vs. 1Q23 | |||
| --- | --- | --- | --- |
| U.S. | 8.1 | 12.0 | 3.0 |
| International | 3.0 | 6.4 | 0.8 |
| Total reported | 5.1 | 9.2 | 1.5 |
| Impact of foreign exchange | (2.6) | (1.3) | (3.8) |
| Organic | 7.7 | 10.5 | 5.3 |
| U.S. | 8.1 | 12.0 | 3.0 |
| International | 7.4 | 8.9 | 6.4 |
Worldwide Nutrition sales increased 5.1 percent on a reported basis and 7.7 percent on an organic basis in the first quarter.
In Pediatric Nutrition, global sales increased 9.2 percent on a reported basis and 10.5 percent on an organic basis. In the U.S., sales growth of 12.0 percent was primarily driven by market share gains in the infant formula business. International sales increased 6.4 percent on a reported basis and 8.9 percent on an organic basis, which was led by strong growth in Canada and several countries in Asia Pacific and Latin America.
In Adult Nutrition, global sales increased 1.5 percent on a reported basis and 5.3 percent on an organic basis, which was led by growth of Ensure®, Abbott's market-leading complete and balanced nutrition brand.
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Diagnostics
First Quarter 2024 Results (1Q24)
| Sales 1Q24 ($ in millions) | Total | Core Laboratory | Molecular | Point of Care | Rapid Diagnostics |
|---|---|---|---|---|---|
| U.S. | 931 | 310 | 42 | 98 | 481 |
| International | 1,283 | 895 | 87 | 41 | 260 |
| Total reported | 2,214 | 1,205 | 129 | 139 | 741 |
| % Change vs. 1Q23 | |||||
| --- | --- | --- | --- | --- | --- |
| U.S. | (30.3) | 7.3 | (10.6) | 5.6 | (46.9) |
| International | (5.1) | 0.2 | (12.5) | (0.6) | (18.3) |
| Total reported | (17.6) | 2.0 | (11.9) | 3.7 | (39.5) |
| Impact of foreign exchange | (2.1) | (3.9) | (0.2) | 0.1 | (0.8) |
| Organic | (15.5) | 5.9 | (11.7) | 3.6 | (38.7) |
| Impact of COVID-19 testing sales | (20.9) | (0.3) | (10.9) | — | (44.3) |
| Organic (excluding COVID-19 tests) | 5.4 | 6.2 | (0.8) | 3.6 | 5.6 |
| U.S. | 7.0 | 7.7 | 6.2 | 5.6 | 6.9 |
| International | 4.4 | 5.7 | (3.6) | (0.8) | 3.5 |
As expected, Diagnostics sales growth in the first quarter was negatively impacted by year-over-year declines in COVID-19 testing-related sales3. Worldwide COVID-19 testing sales were $204 million in the first quarter of 2024 compared to $730 million in the first quarter of the prior year.
Excluding COVID-19 testing-related sales, global Diagnostics sales increased 2.7 percent on a reported basis and 5.4 percent on an organic basis.
Excluding COVID-19 testing-related sales, global Core Laboratory Diagnostics sales increased 2.2 percent on a reported basis and 6.2 percent on an organic basis, led by continued strong adoption of Abbott's Alinity® family of diagnostics systems and testing portfolios.
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Established Pharmaceuticals
First Quarter 2024 Results (1Q24)
| Sales 1Q24 ($ in millions) | Total | Key Emerging Markets | Other |
|---|---|---|---|
| U.S. | — | — | — |
| International | 1,226 | 928 | 298 |
| Total reported | 1,226 | 928 | 298 |
| % Change vs. 1Q23 | |||
| --- | --- | --- | --- |
| U.S. | n/a | n/a | n/a |
| International | 3.1 | 1.7 | 7.6 |
| Total reported | 3.1 | 1.7 | 7.6 |
| Impact of foreign exchange | (10.6) | (13.7) | (0.6) |
| Organic | 13.7 | 15.4 | 8.2 |
| U.S. | n/a | n/a | n/a |
| International | 13.7 | 15.4 | 8.2 |
Established Pharmaceuticals sales increased 3.1 percent on a reported basis and 13.7 percent on an organic basis in the first 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 1.7 percent on a reported basis and 15.4 percent on an organic basis, led by growth in several geographies and therapeutic areas, including respiratory, women's health, and central nervous system/pain management.
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Medical Devices
First Quarter 2024 Results (1Q24)
| Sales 1Q24 ($ in millions) | Total | Rhythm Management | Electro-<br>physiology | Heart Failure | Vascular | Structural Heart | Neuro-modulation | Diabetes Care |
|---|---|---|---|---|---|---|---|---|
| U.S. | 2,034 | 271 | 269 | 237 | 254 | 233 | 181 | 589 |
| International | 2,419 | 291 | 318 | 68 | 435 | 282 | 45 | 980 |
| Total reported | 4,453 | 562 | 587 | 305 | 689 | 515 | 226 | 1,569 |
| % Change vs. 1Q23 | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| U.S. | 14.4 | 4.5 | 13.1 | 8.7 | 16.4 | 10.8 | 16.8 | 22.8 |
| International | 14.0 | 9.0 | 18.9 | 7.7 | 9.1 | 12.5 | 9.8 | 17.6 |
| Total reported | 14.2 | 6.8 | 16.2 | 8.5 | 11.7 | 11.7 | 15.3 | 19.5 |
| Impact of foreign exchange | (1.2) | (0.7) | (2.2) | 0.1 | (1.0) | (1.3) | (2.1) | (1.2) |
| Impact of CSI | 1.1 | — | — | — | 6.9 | — | — | — |
| Organic | 14.3 | 7.5 | 18.4 | 8.4 | 5.8 | 13.0 | 17.4 | 20.7 |
| U.S. | 12.1 | 4.5 | 13.1 | 8.7 | (1.8) | 10.8 | 16.8 | 22.8 |
| International | 16.1 | 10.3 | 23.0 | 7.1 | 9.9 | 14.8 | 19.6 | 19.6 |
Worldwide Medical Devices sales increased 14.2 percent on a reported basis and 14.3 percent on an organic basis in the first quarter, including double-digit growth in both the U.S. and internationally.
Sales growth was led by double-digit growth in Diabetes Care, Electrophysiology, Neuromodulation, and Structural Heart. Several recently launched products and new indications contributed to the strong performance, including Amplatzer® Amulet®, Navitor®, TriClip®, and AVEIR®.
In Electrophysiology, internationally, sales grew 18.9 percent on a reported and 23.0 percent on an organic basis, which included organic sales growth of 20.4 percent in Europe.
In Diabetes Care, FreeStyle Libre sales were $1.5 billion, which represents sales growth of 22.4 percent on a reported basis and 23.3 percent on an organic basis.
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ABBOTT'S EARNINGS-PER-SHARE GUIDANCE
Abbott projects full-year 2024 diluted earnings per share under GAAP of $3.25 to $3.40. Abbott forecasts specified items for the full-year 2024 of $1.30 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 would be $4.55 to $4.70 for the full-year 2024.
Abbott projects second-quarter 2024 diluted earnings per share under GAAP of $0.69 to $0.73. Abbott forecasts specified items for the second-quarter 2024 of $0.39 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 would be $1.08 to $1.12 for the second quarter 2024.
ABBOTT DECLARES 401ST CONSECUTIVE QUARTERLY DIVIDEND
On February 16, 2024, the board of directors of Abbott declared the company's quarterly dividend of $0.55 per share. Abbott's cash dividend is payable May 15, 2024, to shareholders of record at the close of business on April 15, 2024.
Abbott has increased its dividend payout for 52 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 114,000 colleagues serve people in more than 160 countries.
Connect with us at www.abbott.com and on LinkedIn, Facebook, Instagram, X and YouTube.
Abbott will live-webcast its first-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.
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— 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, 2023, 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.
| Abbott Financial:<br><br>Michael Comilla, 224-668-1872<br><br>Tamika LeBean, 224-399-5082<br><br>Ryan Aliff, 224-667-2299 | Abbott Media:<br><br>Karen Twigg May, 224-668-2681<br><br>Kate Dyer, 224-668-9965 |
|---|
1In the first quarter of 2024, total worldwide sales were $9.964 billion and COVID-19 testing-related sales were $204 million. In the first quarter of 2023, total worldwide sales were $9.747 billion and COVID-19 testing-related sales were $730 million.
2Abbott has not provided the related GAAP financial measure for organic sales growth, excluding COVID-19 testing-related sales, on a forward-looking basis because the company is unable to predict with reasonable certainty the impact of foreign exchange due to the unpredictability of future changes in foreign exchange rates, which could significantly impact reported sales growth. In addition, as the COVID-19 pandemic has shifted to an endemic state, the company has determined that it is unable to predict with reasonable certainty future COVID-19 test sales due to the unpredictability of demand for COVID-19 tests.
3Diagnostic sales and COVID-19 testing-related sales in 2024 and 2023 are summarized below:
| Sales 1Q24 | COVID Tests Sales 1Q24 | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ($ in millions) | U.S. | Int'l | Total | U.S. | Int'l | Total | ||||||||
| Total Diagnostics | 931 | 1,283 | 2,214 | 153 | 51 | 204 | ||||||||
| Core Laboratory | 310 | 895 | 1,205 | 1 | 2 | 3 | ||||||||
| Molecular | 42 | 87 | 129 | 3 | 1 | 4 | ||||||||
| Rapid Diagnostics | 481 | 260 | 741 | 149 | 48 | 197 | Sales 1Q23 | COVID Tests Sales 1Q23 | ||||||
| --- | --- | --- | --- | --- | --- | |||||||||
| ($ in millions) | U.S. | Int'l | Total | U.S. | Int'l | Total | ||||||||
| Total Diagnostics | 1,335 | 1,353 | 2,688 | 608 | 122 | 730 | ||||||||
| Core Laboratory | 289 | 893 | 1,182 | 2 | 4 | 6 | ||||||||
| Molecular | 47 | 100 | 147 | 10 | 10 | 20 | ||||||||
| Rapid Diagnostics | 906 | 319 | 1,225 | 596 | 108 | 704 |
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Abbott Laboratories and Subsidiaries
Condensed Consolidated Statement of Earnings
First Quarter Ended March 31, 2024 and 2023
(in millions, except per share data)
(unaudited)
| 1Q24 | 1Q23 | % Change | |
|---|---|---|---|
| Net Sales | $9,964 | $9,747 | 2.2 |
| Cost of products sold, excluding amortization expense | 4,463 | 4,331 | 3.0 |
| Amortization of intangible assets | 472 | 491 | (3.9) |
| Research and development | 684 | 654 | 4.5 |
| Selling, general, and administrative | 2,959 | 2,762 | 7.1 |
| Total Operating Cost and Expenses | 8,578 | 8,238 | 4.1 |
| Operating Earnings | 1,386 | 1,509 | (8.1) |
| Interest expense, net | 61 | 52 | 18.4 |
| Net foreign exchange (gain) loss | — | 6 | (92.2) |
| Other (income) expense, net | (111) | (111) | (0.4) |
| Earnings before taxes | 1,436 | 1,562 | (8.1) |
| Taxes on earnings | 211 | 244 | (13.7) |
| Net Earnings | $1,225 | $1,318 | (7.0) |
| Net Earnings excluding Specified Items, as described below | $1,729 | $1,815 | (4.7) |
| Diluted Earnings per Common Share | $0.70 | $0.75 | (6.7) |
| Diluted Earnings per Common Share,<br>excluding Specified Items, as described below | $0.98 | $1.03 | (4.9) |
| Average Number of Common Shares Outstanding<br>Plus Dilutive Common Stock Options | 1,750 | 1,752 |
NOTES:
See tables on page 11 for an explanation of certain non-GAAP financial information.
n/m = Percent change is not meaningful.
See footnotes on the following page.
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1)2024 Taxes on Earnings includes the recognition of approximately $10 million of net tax expense as a result of the resolution of various tax positions related to prior years.
2023 Taxes on Earnings includes the recognition of approximately $22 million of net tax expense as a result of the resolution of various tax positions related to prior years.
2)2024 Net Earnings and Diluted Earnings per Common Share, excluding Specified Items, excludes net after-tax charges of $504 million, or $0.28 per share, for intangible amortization, charges related to restructuring and cost reduction initiatives, expenses associated with acquisitions and other net expenses.
2023 Net Earnings and Diluted Earnings per Common Share, excluding Specified Items, excludes net after-tax charges of $497 million, or $0.28 per share, for intangible amortization, charges related to restructuring and cost reduction initiatives, expenses associated with acquisitions and other net expenses.
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Abbott Laboratories and Subsidiaries
Non-GAAP Reconciliation of Financial Information
First Quarter Ended March 31, 2024 and 2023
(in millions, except per share data)
(unaudited)
| 1Q24 | ||||||
|---|---|---|---|---|---|---|
| As<br>Reported (GAAP) | Specified Items | As<br>Adjusted | ||||
| Intangible Amortization | $ | 472 | $ | (472) | $ | — |
| Gross Margin | 5,029 | 518 | 5,547 | |||
| R&D | 684 | (21) | 663 | |||
| SG&A | 2,959 | (34) | 2,925 | |||
| Other (income) expense, net | (111) | (26) | (137) | |||
| Earnings before taxes | 1,436 | 599 | 2,035 | |||
| Taxes on Earnings | 211 | 95 | 306 | |||
| Net Earnings | 1,225 | 504 | 1,729 | |||
| Diluted Earnings per Share | $ | 0.70 | $ | 0.28 | $ | 0.98 |
Specified items reflect intangible amortization expense of $472 million and other net expenses of $127 million associated with restructuring actions, costs associated with acquisitions, investment impairment charges and other net expenses. See page 14 for additional details regarding specified items.
| 1Q23 | ||||||
|---|---|---|---|---|---|---|
| As<br>Reported (GAAP) | Specified Items | As<br>Adjusted | ||||
| Intangible Amortization | $ | 491 | $ | (491) | $ | — |
| Gross Margin | 4,925 | 520 | 5,445 | |||
| R&D | 654 | (26) | 628 | |||
| SG&A | 2,762 | (2) | 2,760 | |||
| Earnings before taxes | 1,562 | 548 | 2,110 | |||
| Taxes on Earnings | 244 | 51 | 295 | |||
| Net Earnings | 1,318 | 497 | 1,815 | |||
| Diluted Earnings per Share | $ | 0.75 | $ | 0.28 | $ | 1.03 |
Specified items reflect intangible amortization expense of $491 million and other net expenses of $57 million associated with restructuring actions, costs associated with acquisitions and other net expenses. See page 15 for additional details regarding specified items.
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A reconciliation of the first-quarter tax rates for 2024 and 2023 is shown below:
| 1Q24 | |||||||
|---|---|---|---|---|---|---|---|
| ($ in millions) | Pre-Tax<br>Income | Taxes on<br>Earnings | Tax<br>Rate | ||||
| As reported (GAAP) | $ | 1,436 | $ | 211 | 14.7 | % | 1) |
| Specified items | 599 | 95 | |||||
| Excluding specified items | $ | 2,035 | $ | 306 | 15.0 | % | |
| 1Q23 | |||||||
| --- | --- | --- | --- | --- | --- | --- | --- |
| ($ in millions) | Pre-Tax<br>Income | Taxes on<br>Earnings | Tax<br>Rate | ||||
| As reported (GAAP) | $ | 1,562 | $ | 244 | 15.6 | % | 2) |
| Specified items | 548 | 51 | |||||
| Excluding specified items | $ | 2,110 | $ | 295 | 14.0 | % |
1)2024 Taxes on Earnings includes the recognition of approximately $10 million of net tax expense as a result of the resolution of various tax positions related to prior years.
2)2023 Taxes on Earnings includes the recognition of approximately $22 million of net tax expense as a result of the resolution of various tax positions related to prior years.
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Abbott Laboratories and Subsidiaries
Non-GAAP Revenue Reconciliation
First Quarter Ended March 31, 2024 and 2023
($ in millions)
(unaudited)
| 1Q24 | 1Q23 | % Change vs. 1Q23 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Non-GAAP | |||||||||
| Abbott Reported | Impact of CSI acquisition | Adjusted Revenue | Abbott Reported | Impact of CSI acquisition | Adjusted Revenue | Reported | Adjusted | Organic | |
| Total Company | 9,964 | (42) | 9,922 | 9,747 | — | 9,747 | 2.2 | 1.8 | 4.7 |
| U.S. | 3,846 | (40) | 3,806 | 3,928 | — | 3,928 | (2.1) | (3.1) | (3.1) |
| Intl | 6,118 | (2) | 6,116 | 5,819 | — | 5,819 | 5.2 | 5.1 | 9.9 |
| Total Medical Devices | 4,453 | (42) | 4,411 | 3,900 | — | 3,900 | 14.2 | 13.1 | 14.3 |
| U.S. | 2,034 | (40) | 1,994 | 1,778 | — | 1,778 | 14.4 | 12.1 | 12.1 |
| Intl | 2,419 | (2) | 2,417 | 2,122 | — | 2,122 | 14.0 | 13.9 | 16.1 |
| Vascular | 689 | (42) | 647 | 617 | — | 617 | 11.7 | 4.8 | 5.8 |
| U.S. | 254 | (40) | 214 | 218 | — | 218 | 16.4 | (1.8) | (1.8) |
| Intl | 435 | (2) | 433 | 399 | — | 399 | 9.1 | 8.4 | 9.9 |
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Abbott Laboratories and Subsidiaries
Details of Specified Items
First Quarter Ended March 31, 2024
(in millions, except per share data)
(unaudited)
| Acquisition or<br>Divestiture-<br>related (a) | Restructuring<br>and Cost<br>Reduction<br>Initiatives (b) | Intangible<br>Amortization | Other (c) | Total<br>Specifieds | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Gross Margin | $ | 1 | $ | 42 | $ | 472 | $ | 3 | $ | 518 |
| R&D | (3) | (2) | — | (16) | (21) | |||||
| SG&A | (14) | (9) | — | (11) | (34) | |||||
| Other (income) expense, net | 12 | — | — | (38) | (26) | |||||
| Earnings before taxes | $ | 6 | $ | 53 | $ | 472 | $ | 68 | 599 | |
| Taxes on Earnings (d) | 95 | |||||||||
| Net Earnings | $ | 504 | ||||||||
| Diluted Earnings per Share | $ | 0.28 |
The table above provides additional details regarding the specified items described on page 11.
a)Acquisition-related expenses include integration costs, which represent incremental costs directly related to integrating acquired businesses, as well as other costs related to business acquisitions.
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 various investment impairment charges and 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.
d)Reflects the net tax benefit associated with the specified items.
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Abbott Laboratories and Subsidiaries
Details of Specified Items
First Quarter Ended March 31, 2023
(in millions, except per share data)
(unaudited)
| Acquisition or<br>Divestiture-<br>related (a) | Restructuring<br>and Cost<br>Reduction<br>Initiatives (b) | Intangible<br>Amortization | Other (c) | Total<br>Specifieds | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Gross Margin | $ | 5 | $ | 21 | $ | 491 | $ | 3 | $ | 520 |
| R&D | (4) | 1 | — | (23) | (26) | |||||
| SG&A | (4) | (4) | — | 6 | (2) | |||||
| Other (income) expense, net | (6) | — | — | 6 | — | |||||
| Earnings before taxes | $ | 19 | $ | 24 | $ | 491 | $ | 14 | 548 | |
| Taxes on Earnings (d) | 51 | |||||||||
| Net Earnings | $ | 497 | ||||||||
| Diluted Earnings per Share | $ | 0.28 |
The table above provides additional details regarding the specified items described on page 11.
a)Acquisition-related expenses include legal and other costs related to business acquisitions as well as integration costs, which represent incremental costs directly related to integrating acquired businesses.
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.
d)Reflects the net tax benefit associated with the specified items.
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