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Abbott Laboratories’ Nutrition Business: A Turnaround Story

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Nutrition business revenue trends

According to Abbott Laboratories’ (ABT) third-quarter earnings conference call, it expects its Nutrition business to have low- to mid-single-digit YoY (year-over-year) revenue growth in fiscal 2018. International markets have been its major driver YTD (year-to-date).

According to Abbott Laboratories’ investor presentation, the rise in the aging population around the world and the expansion of the middle-class population in emerging markets could continue to boost the demand for nutrition products. The presentation also claimed that Abbott is a global leader in the adult nutrition segment and a leader in the pediatric nutrition segment in the United States.

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Revenue performance YTD

In the first nine months of 2018, Abbott’s pediatric nutrition business reported revenues of $3.08 billion, which was a YoY organic growth of 6.3% and a reported growth of 6.8%. Of those revenues, $1.38 billion came from the US market, which was a YoY organic and reported growth of 3.7%.

International markets contributed $1.71 billion in revenues, which was a YoY rise of 9.3% and an organic growth of 8.5%. The pediatric nutrition business continues to have a solid demand in the Chinese market, despite the introduction of revised food safety laws in the country.

In the first nine months of 2018, Abbot’s adult nutrition business reported revenues of $2.37 billion, which was a YoY organic growth of 5.1% and a reported growth of 5.2%. Of those revenues, $937 million came from the US market, which was a YoY organic and reported growth of 0.2%. In its third-quarter conference call, the company attributed adult nutrition’s flat revenue performance in the US market to winding down its non-core product.

Adult nutrition reported $1.43 billion of revenues from international markets, which was a YoY rise of 8.7% and an organic growth of 8.5%. Abbott said in its conference call that robust demand for Glucerna and Ensure in international markets played a pivotal role in boosting revenues in the adult nutrition business.

In the next part, we’ll look at the trends for Abbott Laboratories’ Rapid Diagnostics business.

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