(Reuters) - Abbott Laboratories (NYSE:ABT) on Wednesday reported lower-than-expected growth in international medical device sales, hit by a strong dollar and supply challenges in China, dragging down shares of the company nearly 7%.
The U.S.-based company's weak medical device sales in markets outside its home country offset the initial enthusiasm over its quarterly beat and an upbeat forecast.
Abbott reported $3.62 billion in overall medical device sales, down 0.5% from last year, as the company faced supply challenges due to lockdowns in China.
J.P. Morgan analyst Robbie Marcus says the issues plaguing the medical device segment "could bleed a bit into" the first quarter next year as well.
Multinational companies such as Abbott and Johnson & Johnson (NYSE:JNJ) have been hit by the dollar's strength against a basket of currencies, including the sterling and the yen, after the U.S. Federal Reserve ramped up interest rates to tame inflation.
Illinois-based Abbott reported third-quarter worldwide sales of $10.4 billion, down 4.7% from a year ago.
Excluding the foreign exchange impact, overall sales were up 1.3%, while the medical device segment saw 6.4% growth.
COVID-19 test kit sales were $1.7 billion, compared to $2.3 billion in the second quarter, as testing declined amid a slower pace of infections.
Abbott said it expects around $7.8 billion in COVID-19 test sales this year, with $500 million in the fourth quarter, compared to the $6.1 billion it had forecast earlier.
Medical device makers such as Abbott have relied on COVID-19 tests to bring in sales during the peak of the pandemic. However, demand has been slowing as more people get vaccinated and overall cases stabilize.
Abbott's stock had declined 25% this year through Tuesday, as the company also struggled with a shutdown of its baby formula facility at Sturgis, Michigan.