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Strong Revenue for Abbott Point of Care Diagnostics Division

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Apr. 25 2016, Updated 11:01 a.m. ET

Abbott’s diagnostics sales

Abbott Laboratories (ABT) reported ~$5.2 billion of revenues worldwide in 4Q15. Of that, ~$1.2 billion was generated through Abbott Point of Care diagnostics, which contributed ~23% to Abbott’s total revenues. These sales figures represent about a 7% YoY (year-over-year) increase in 4Q15 on an operational basis. But the negative foreign exchange impact of ~8.1% led to the reported decline in revenues of ~1.1%. Core Laboratory and Molecular Diagnostics sales reported a decline of 1.8% and 3.9%, respectively. Abbott Point of Care sales grew at a rate of ~7.3%.

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Key growth drivers

Abbott’s operational sales grew across all divisions of its diagnostic product segment, driven by double-digit growth in emerging markets and market share expansion in the United States and other developed markets. Abbott Laboratories has focused on efficient commercial execution and customer-focused quality offerings in the diagnostics space.

Abbott Point of Care diagnostics division witnessed growth in 4Q15 due to the majority of segment sales—more than 80%—being generated from the United States. So the segment had a lower negative foreign exchange impact. Abbott Point of Care products are medical devices used for accurate and fast analysis of blood at a patient’s bedside. The division’s sales growth was partially driven by the growth of the premier product offering, i-STAT. It’s a handheld device that includes diagnostic and data management capabilities.

Becton Dickinson (BDX) is another major player in point-of-care products. It offers a competing product called the BD Veritor System. Molecular diagnostics growth was led by growth in infectious disease testing, which is the core focus of the division.

Medtronic (MDT) and Thermo Fisher Scientific (TMO) are Abbott Laboratories’ other major competitors in the diagnostic segment of the medical devices industry. Investors can invest in these companies by investing in the Health Care Select Sector SPDR ETF (XLV). Abbott Laboratories, Medtronic, Becton Dickinson, and Thermo Fisher account for approximately 1.8%, 4.2%, 1.2%, and 2.1%, respectively, of XLV’s total holdings.

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