By Leroy Leo and Pratik Jain
(Reuters) -Abbott Laboratories beat Wall Street estimates for quarterly profit on Wednesday on robust sales of its medical devices, but the company's stock fell 3% in morning trading, signaling disappointment over its annual forecast.
Investor expectations around the performance of medical device makers have been heightened since last November after a resurgence in demand, as people, especially older adults, opted for medical procedures deferred during the pandemic.
Abbott forecast a full-year profit of $4.55 to $4.70 per share, raising the lower end from $4.50 per share but maintaining the upper end.
"The ceiling definitely remains the same, and that's the whole point. The stock is going to go up if you beat expectations," said RBC Capital Markets analyst Shagun Singh.
"If you're maintaining expectations, it's already priced into the stock... So that's what's playing right now," she said, adding that she remains positive on Abbott.
Industry bellwether and rival Johnson & Johnson (NYSE:JNJ) also declined 2.1% on Tuesday, after it missed Wall Street estimates for first-quarter medical device sales, despite expecting medtech-related procedure volumes to remain elevated through the year.
Abbott's quarterly medical device sales of $4.45 billion beat analysts' average estimate of $4.30 billion, according to LSEG data.
Within medtech, all the company's sub-segments came in above Street estimates, said Evercore ISI analyst Vijay Kumar. He added that for the brokerage, the growth in Abbott's electrophysiology devices to treat irregular heartbeat was a standout and should allay any fears of a loss in market share.
FreeStyle Libre, Abbott's biggest product, generated sales of $1.5 billion. The device is used mainly by diabetes patients and the company is targeting annual sales of $10 billion by 2028.
Overall, Abbott recorded $9.96 billion in sales for the first quarter ended March 31, compared to analysts' estimate of $9.88 billion.
On an adjusted basis, the Illinois-based company's quarterly profit of 98 cents per share beat analysts' average estimate of 95 cents per share.