Despite falling sales, Abbott Laboratories beat Wall Street expectations and raised its full-year profit forecast for the second time this year.
The medical company reported earnings per share of $1.15 on Wednesday, beating analysts’ forecasts of $0.94.
Chicago-based Abbott saw sales fall 4.7% to $10.4 billion for its third quarter, which ended Sept. 30.
Abbott shares were down more than 7% in midday trading on Wednesday.
The company attributed the drop in revenue to a slowdown in its COVID-19 home testing kits from a year ago and the fallout from the closure of an infant formula factory in Michigan after the United States Food and Drug Administration has found signs of harmful bacteria at ease.
Beyond that, company executives continued to highlight supply chain, medical personnel, inflation and exchange rate pressures.
“Macroeconomic conditions remain challenging,” Abbott CEO Robert Ford said in a morning chat with stock analysts.
Abbott’s strongest area was its medical devices group with U.S. sales up 11.3% from the same period a year ago, driven by diabetes care products which increased by 31.3%.
These gains were offset by declines in global medical device sales. Combined, overall medical device sales were down 0.5% for the quarter.
Abbott has had success with its Libre line of diabetes products. The company received FDA clearance for its FreeStyle Libre 3, a 14-day continuous blood glucose monitor, in May. Abbott presents it as the thinnest and smallest device in its category.
Pediatric sales of its nutrition division – which includes infant formula – fell 39.1% in the United States for the quarter. The company restarted production of Similac and EleCare during the quarter.
Its diagnostics sales fell 10.6% in the United States. The company’s full-year forecast assumes $7.8 billion in sales of COVID-19 tests.
Robert Funck, chief financial officer, said the company does not expect testing to increase in the fourth quarter. Abbott performs the BinaxNow test at home.
The company now expects EPS in the range of $5.17 to $5.23 for the year, which Ford says is more than 10% higher than the company’s outlook at the start of the year.
Abbott acquired St. Paul-based St. Jude Medical Inc. for $25 billion in 2017. The company has about 5,000 employees in Minnesota.