By Mrinalika Roy and Carl O'Donnell
(Reuters) - Abbott Laboratories (NYSE:ABT) said demand for its COVID-19 tests, especially rapid testing, rebounded as the U.S. wrestled with surging coronavirus cases during the quarter, prompting the company to raise its earnings forecast for the year.
The medical device maker's shares rose 3.5% to $123.53 on Wednesday after it also reported third-quarter earnings above analysts' estimates.
The company said it shipped more than 225 million COVID-19 tests globally in the quarter and expects testing to remain an important part of the fight against the virus going into the fourth quarter and 2022.
"Over the last several months, we've learned that COVID-19 vaccines, while a powerful tool, are not the lone solution needed in our global fight against this virus," Chief Executive Officer Robert Ford said.
"Testing, particularly rapid testing, which is fast, affordable and easy to use is an important companion to vaccines and therapeutics."
Abbott and other diagnostics companies have seen higher demand for COVID-19 tests in recent months due to the Delta variant of the virus.
The U.S. government has also announced policies aimed at pushing large employers to have their workers inoculated or tested weekly and invested around $3 billion to procure rapid COVID-19 tests from Abbott and other manufacturers.
The company expects coronavirus test-related sales to be between $1.0 billion and $1.4 billion in the fourth quarter.
In the short term, through the traditional flu season testing volumes will likely remain robust, but this revenue boost could be transitory, Atlantic Equities analyst James Mainwaring said.
Abbott raised its outlook for 2021 adjusted earnings from continuing operations to between $5.00 and $5.10 per share, compared with its previous forecast of $4.30 to $4.50 per share.
On an adjusted basis, the company earned $1.40 per share, beating estimates of 95 cents per share, according to Refinitiv IBES data.