(Reuters) -Abbott Laboratories on Wednesday forecast 2024 profit largely below Wall Street estimates despite meeting quarterly earnings expectations, sending the medical device maker's shares down 2.5% in premarket trading.
Expectations around performance of medical device makers have increased over the last one month after health insurers flagged higher medical costs earlier this month as people, especially older adults, go back for medical procedures they had delayed during the pandemic.
Abbott's forecast also follows strong earnings beat by peers Johnson & Johnson (NYSE:JNJ) and Intuitive Surgical (NASDAQ:ISRG), with bellwether J&J also expecting medtech-related procedures to remain elevated in 2024.
At first glance, Abbott's profit forecast is "a touch light" compared to Wall Street expectations, Mizuho Securities analyst Anthony Petrone said.
He added that medical devices sales beat was driven by its electrophysiology products, which may face competition later this year from newer devices to treat irregular heart rhythm.
Overall, the medical devices unit generated $4.44 billion in sales for the fourth quarter, higher than estimates of $4.33 billion.
The strong med-tech sales was also partly due to strength of its glucose monitoring device FreeStyle Libre, which brought in sales of $1.4 billion in the fourth quarter, up 25.5% year-on-year.
Abbott is banking on Libre for growth, targeting annual sales of $10 billion by 2028.
Its diagnostic segment revenue, which surged during the pandemic, recorded sales of $2.5 billion, in line with estimates but down 22.7% due to a sharp fall in COVID-19 testing-related sales.
It recorded COVID testing sales of $288 million, but did not provide an annual outlook.
Abbott also forecast 2024 adjusted profit in the range of $4.50 to $4.70 per share, with the mid-point below analysts' estimate of $4.64 per share, according to LSEG data.
Excluding items, Abbott's quarterly profit was in line with the average of analysts' estimates of $1.19 per share.