Abbott (ABT) Faces Profit Headwinds as Pediatric Nutrition Remains Under Pressure

Abbott Laboratories (NYSE:ABT) is included among the Dividend Growth Stocks: 25 Aristocrats.

Courtesy of Abbott Labs

A Reuters report said Abbott Laboratories (NYSE:ABT) warned that its current-quarter profit would come in below expectations after the company also fell short of Wall Street’s revenue forecasts on January 22. Pressure has been building in Abbott’s pediatric nutrition business, which has struggled in recent quarters after losing a major US government supply contract last year. At the same time, higher manufacturing costs for consumer packaged goods have weighed on results.

CEO Robert Ford explained that rising production costs pushed prices higher, which ultimately hurt demand as consumers became more sensitive to price increases. “We’ll have a couple quarters here where growth in nutrition is going to be challenged, and then in the second half, we’ll return to positive growth,” Ford said.

Performance across the company was broadly weaker than expected. All four business segments missed sales estimates. Nutrition sales dropped 8.9% year over year to $1.94 billion, while the diagnostics unit saw sales fall 2.5% to $2.46 billion.

Looking ahead, Abbott said it expects adjusted earnings of $1.12 to $1.18 per share in the first quarter, below the analyst consensus of $1.20, according to data compiled by LSEG. Total revenue for the quarter ended December 31 came in at $11.46 billion, short of the $11.80 billion analysts had been expecting. On an adjusted basis, fourth-quarter earnings were $1.50 per share, matching Wall Street forecasts.

Abbott Laboratories (NYSE:ABT) is a global healthcare company focused on discovering, developing, manufacturing, and selling a wide range of healthcare products across multiple categories.

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