By Dhirendra Tripathi
Investing – Shares of Abbott Laboratories (NYSE:ABT) fell more than 8% Tuesday as a falling number of Covid-19 cases has reduced demand for its testing-related business, forcing it to lower its full-year guidance.
Abbott President and Chief Executive Officer Robert B. Ford said there has been a rapid decline in demand for its testing services, and since they anticipate the trend to continue, they are now revising their guidance.
Full-year diluted earnings per share under GAAP are now seen at $2.75 to $2.95. These were expected to be $3.74 at least as per Abbott's April 20 forecast.
The company follows a calendar year.
“This (latest forecast) has been driven by several factors, including significant reductions in cases in the U.S. and other major developed countries, accelerated rollout of COVID-19 vaccines globally and, most recently, U.S. health authority guidance on testing for fully vaccinated individuals,” Abbott said in a note.
Global Covid-19 testing brought the company $2.2 billion in sales in the first quarter, about one-fifth of its total sales of $10.45 billion and more than half the $4.01 billion in revenue from diagnostics.