Abbott’s Medical Devices Segment Posts Dismal 4Q15 Revenues
Abbott Posts 4Q15 Results: Expected Earnings, Missed Revenues
Abbott’s Medical Devices segment sales
Abbott Laboratories (ABT) reported ~$1.3 billion of revenues through its Medical Devices segment. The segment contributed about 25% of the company’s total revenues of ~$5.2 billion in 4Q15.
These sales figures represent about a 0.7% YoY (year-over-year) increase in 4Q15 on an operational basis. But the negative foreign exchange impact of ~6.6% led to the reported decline in revenues of ~5.9%. The diabetes care and medical optics divisions of the segment witnessed operational sales growth of ~2.4% and ~1.9%, respectively. The vascular division’s operational sales saw a decline of ~0.5%.
The above chart shows YoY sales growth in all the quarters of 2015 for various divisions of Abbott’s Medical Devices segment. Although the company continued to report a YoY decline in revenues, the sequential growth in revenues was registered.
Key growth drivers
During 4Q15, sales for the Medical Devices segment witnessed marginal growth. The segment generated approximately 65% of its sales from international markets and thus faced high exposure to foreign exchange fluctuations.
MitraClip generated sales of more than $250 million, representing a double-digit worldwide growth in product sales. In 2015, Abbott made some further strategic acquisitions and entered into agreements that led to the strengthening of its position in the transcatheter mitral valve repair market. These acquisitions include Tendyne and Cephea Valve Technologies.
The company also witnessed an increased demand for its flash glucose monitor FreeStyle Libre in Europe, which led to capacity expansion initiatives. In 2015, Abbott’s Medical Devices segment was impacted by slow growth in the coronary stent market, a negative foreign exchange impact, and a challenging environment in Venezuela. Although all these impacted performance, the segment is positioned for long-term growth. It will most likely be driven by its strong product portfolio, emerging market growth, and increasing market share in developed markets.
Investors looking to gain exposure to Abbott Laboratories can invest in the Guggenheim S&P Equal Weight Health Care ETF (RYH). RYH accounts for approximately 1.7%, 1,8%, 1.9%, and 1.8% in Abbott Laboratories, Medtronic (MDT), Stryker (SYK), and Boston Scientific (BSX), respectively.
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