Abbott Laboratories (NYSE: ABT) is up 8.0% this morning after reporting strong results for its fiscal Q1 despite a significant slowdown in sales of COVID-19 tests.
Jim Cramer’s view on Abbott stock
The health care company continues to see $4.30 a share to $4.50 a share of earnings this year on at least a high single-digit percentage growth in organic sales.
That was sufficient for famed investor and Mad Money host Jim Cramer to recommend buying Abbott stock today.
Abbott is a clear winner. They’ve got some franchises that are amazing. Diabetes franchise is very strong. They’re telling a very good story. They are now past COVID. Clear beat, well done.
Nutrition and medical devices did great in Q1
Abbott Laboratories took a 47% hit to its diagnostics revenue in the recent quarter as COVID tests sales crashed from $3.3 billion a year ago to $730 million.
It was, however, offset by the strength in the company’s nutrition and medical devices business. On CNBC’s “Squawk on the Street”, Cramer added:
They have the scale, they have Libre, a way to measure glucose. It’s a fabulous inexpensive device that could be a $10 billion franchise without a problem and the Street is not recognising it.
Abbott stock is currently just under its year-to-date high.
Abbott Laboratories Q1 earnings snapshot
Earned $1.32 billion versus the year-ago $2.45 billion
Per-share earnings also tanked from $1.37 to 75 cents
Adjusted EPS printed at $1.03 as per the press release
Sales declined 18% year-over-year to $9.75 billion
Consensus was 99 cents EPS on $9.67 billion revenue
The multinational agreed, though, that sales of its COVID tests will bring in $1.5 billion in 2023 versus $2.0 billion it had guided for earlier. Still, Cramer said:
The presentation was extraordinarily clean and good, it made you feel very confident in buying this one.
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