Abbott sales soar in flat Q4 earnings

Abbott Laboratories' (ABT) fourth-quarter sales are being driven by the success of its medical device segment while meeting earnings expectations. Yahoo Finance Health Reporter Anjalee Khemlani comments on Abbott's performance through 2023 health trends — such as GLP-1 weight loss drugs — and its business strategies moving forward.

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Editor's note: This article was written by Luke Carberry Mogan.

Video transcript

SEANA SMITH: All right, guys, let's take a look at Abbott, because that's a trending ticker here this morning. Shares under a bit of pressure following its earnings report. You can see the stock off just about a 3%. A lot of that is because of the guidance that we got out here from the company.

Now despite a solid report here in its most recent quarter, falling demand for its COVID-19 tests was also one of the issues here. So let's bring in Anjalee Khemlani, who's closely following this. Anj, what do you think this report tells us just about what we could expect here in the year ahead?

ANJALEE KHEMLANI: Yeah, so it seems like unlike other companies that kind of relied heavily on their COVID profits, Abbott took a step to make sure that they have been actually beating the slump that other companies have had, especially those vaccine companies.

Abbott has also had the benefit of the GLP-1 boom. Despite earlier predictions that it could really hamper the medtech sector, Abbott has seen actually growth there as a result of these drugs, the Novo Nordisk and Eli Lilly drugs that have been coming out. They've seen an increase in the use of glucose monitoring systems. CEO Robert Ford said that they are actually seeing 7 out of 10 new prescriptions for their Libre device. So that's one area where the company is really seeing that strength and that growth.

Meanwhile, there's also a pretty strong balance sheet as a result of this return to the use of med tech's-- med tech and med devices. They do have about $20 billion on hand to be able to allocate for mergers and acquisitions. That's something that analysts are looking for when it comes to the company's outlook.

They haven't had any major deals in recent years, but executives said on the call today that they're not necessarily looking to utilize that unless it makes sense strategically, not just to fill a gap. We've seen a lot of that happening with companies looking at how to really utilize their market cap-- their capital allocation to ensure more growth in the near future. So that's another area.

And then on the COVID test, like you said, they've seen that soft demand. They're not really relying on it anymore, but they are looking at increases in general-- or sort of a flat situation when it comes to the testing of-- what they have for tests. So that's sort of the story for Abbott. And analysts are kind of concerned by that outlook on the guidance, kind of lighter than they expected, but Abbott seems to be signaling steady 2024.