Abbott Laboratories Inc. said Tuesday that it is lowering its earnings per share forecast for 2021 due to reduced demand for Covid-19 tests, which the company manufactures.
Following the announcement, the stock price for Abbott (NYSE: ABT) dropped by nearly $11 — more than 9% — to $105.79 per share at market close on Tuesday, compared with nearly $117 per share on Friday before the Memorial Day weekend, according to Yahoo Finance. Tuesday's stock price is at its lowest since October 30, 2020.
The company now projects its full-year 2021 adjusted diluted EPS to be $4.30 to $4.50, compared with the at least $5.00 guidance it set forth on April 20 in its first-quarter 2021 earnings report. Abbott reported an EPS of $3.65 for its full-year 2020.
"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's president and CEO Robert Ford said in a statement. "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."
Last year, Abbott received emergency use authorization from the U.S. Food and Drug Administration for its rapid antigen BinaxNow Covid-19 test kit, which syncs to a free mobile app to display test results in 15 minutes. The market for rapid testing has been particularly impacted by declining demand for Covid-19 tests, according to Abbott's Tuesday announcement.
The company said the reduced demand is due to a declining number of Covid-19 cases in the U.S. and other developed countries, accelerated rollout of Covid-19 vaccines, and U.S. health authority guidance on testing for fully vaccinated individuals, according to the statement.
Abbott is based in Abbott Park, Illinois, a suburb north of Chicago. It is a major employer of Kenosha County residents given its proximity to the Wisconsin-Illinois border. Company spokespeople previously told the Business Journal that Abbott employs more than 800 people who live in Wisconsin.
Abbott reported full-year 2020 sales of $34.6 billion, a 10% increase from the prior year.
