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Abbott Laboratories Slumps on Lower Profit Outlook Amid COVID Test Decline

Abbott Labs CEO Robert Ford said the group has seen a "rapid decline in COVID-19 testing demand and (we) anticipate this trend will continue'.

Abbott Laboratories  (ABT) - Get Report shares slumped lower Tuesday after the group issued weaker 2021 profit forecasts that reflected the impact of weakening demand for COVID testing 

Abbott Labs lowered its adjusted earnings from continuing operations forecast from $5 per share to a range of $4.30 to $4.50 per share, with a current quarter estimate of around $1 per share. Abbott had told investors on April 20 that it was "right on track" with its profit forecasts after posting global COVID testing related sales of $2.2 billion for the first quarter, led by combined sales of $1.8 billion from Abbott's BinaxNow, Panbio and ID Now rapid-testing kits.

Abbott said Tuesday, however, that accelerated vaccine rollouts, changes in CDC guidance and a significant  reduction in cases has "fundamentally impacted market demand for COVID-19 testing, particularly for surveillance and screening with rapid testing."  

"We've recently seen a rapid decline in COVID-19 testing demand and anticipate this trend will continue, which led us to adjust our full-year guidance," said CEO Robert Ford. "At the same time, excluding COVID-19 tests, our organic base business growth is accelerating, we continue to see improving end-markets and our new product pipeline continues to be highly productive."  

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Abbott Labs shares were marked 6% lower in early trading on the New York Stock Exchange Tuesday to change hands at $109.56 each, a move that would erase nearly all of the stock's year-to-date advance.

Abbott posted first quarter earnings of $1.32 per share on April 20, more than double its bottom line from the same period last year and 5 cents ahead of the Street consensus forecast. Group revenues rose 35% to $10.46 billion.

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