Abbott (NYSE:ABT) announced today that it is cutting its earnings outlook for the year amid reduced demand for COVID-19 diagnostics.
The news sent ABT shares down more than 6% to $109.25 apiece in morning trading. MassDevice‘s MedTech 100 Index, which includes stocks of the world’s largest medical device companies, was down slightly.
Abbott had previously projected adjusted EPS of at least $5 this year. Now, it’s predicting EPS in the $4.30 to $4.50 range. EPS under GAAP will be $2.75 to $2.95, according to the company.
It appears that progress against the pandemic in the U.S. and many other developed countries was bad news for Abbott’s earnings. The company says positive trends have suddenly and fundamentally impacted market demand for COVID-19 tests.
The accelerated rollout of COVID-19 vaccines has significantly reduced cased numbers in the U.S. and other wealthy countries. In addition, the CDC has updated its recommendations to say that fully vaccinated people, in many cases, don’t need to get tested after exposure to someone with the novel coronavirus or while traveling.
“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,” Abbott CEO Robert B. Ford said in a news release. “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.”