By Khushi Mandowara and Pratik Jain
(Reuters) -Abbott Laboratories on Thursday beat quarterly profit expectations as a rebound in surgical procedure volumes drove demand for medical devices despite high inflation-driven costs, sending shares up by nearly 4%.
Demand for medical devices and non-COVID-19 testing is expected to rise this year, as older adults in particular get more comfortable visiting hospitals and staffing shortages at those facilities ease.
Abbott CEO Robert Ford said the great momentum in device and diagnostics sales during the quarter was due to improving market conditions in healthcare.
Rival J&J’s medical device segment also topped estimates, aided by a recovery in demand for medical procedures.
Abbott’s comments on medical procedures, echoed by J&J and UnitedHealth, suggest the current recovery in non-urgent surgeries is sustainable, RBC Capital Markets analyst Shagun Singh said.
Shares of rival medical device makers Medtronic and Boston Scientific Corp rose nearly 3%.
Abbott clocked quarterly sales for its medical devices at $4.3 billion, with $1.3 billion coming from diabetes device Freestyle Libre, beating analysts’ estimates of $4.10 billion.
Abbott’s diagnostic sales in the quarter were in line with expectations at $2.3 billion.
The company cut its annual COVID-related sales forecast to $1.3 billion, from $1.5 billion previously, as sales of coronavirus testing products slumped after the U.S. government ended the COVID Public Health Emergency on May 11.
Abbott maintained its annual profit of $4.30 to $4.50 per share.
Sales from nutrition were $2.1 billion, as the company said it recovered 75% of the share it lost in the baby formula market after the shutdown at its Michigan plant last year, along with recalls of the formula produced at the facility.
Abbott’s adjusted profit of $1.08 per share in the quarter beat analysts’ estimates of $1.05.
(Reporting by Khushi Mandowara and Pratik Jain in Bengaluru; Editing by Pooja Desai)