Diversified health care company Abbott beat profit expectations for the first quarter with strong medical device sales and a rebounding baby formula business.
Abbott reported adjusted earnings per share of $1.03 for the quarter, topping consensus estimates from Wall Street analysts by four cents per share.
The company's stock price jumped nearly 8% and closed at $112.29 per share Wednesday.
CEO Robert Ford told analysts Wednesday morning the company is seeing improved staffing levels at hospitals, which bolsters the number of medical procedures being done. Abbott's medical device sales were up 15% for the quarter.
The company's sales of $9.7 billion were down 18% compared to a year ago due to declines in sales of its COVID tests such as the BinaxNow at-home test. Abbott's worldwide COVID testing sales were down about 78% for the quarter.
Pediatric nutrition sales were up 36% in the U.S., bouncing back from problems the company saw last year. Abbott temporarily closed its baby formula plant in Sturgis, Mich., in the wake of the U.S. Food and Drug Administration finding strains of bacteria there.
"Stripping out declining COVID-19 sales and profits, which was expected, reveals an even stronger quarter for Abbott than meets the eye. The medical devices division was the star of the show, growing better than our cautiously optimistic expectations," wrote John Boylan, senior equity analyst with Edward Jones, in a research note on the numbers.
While COVID test sales are down, Ford said Abbott's once-booming sales helped to strengthen the company.
He said the company has been "reinvesting COVID revenue and profits into the base business."
In early February, Abbott announced a deal to acquire New Brighton-based Cardiovascular Systems Inc. for $890 million. CSI's devices focus on atherectomy, a minimally invasive procedure to address plaque build-up in arteries.
"It's a great strategic fit. They have a strong position in a growth area that we like," Ford said on Wednesday's conference call.
The deal could close soon. CSI shareholders will vote on the transaction in a special meeting April 27.
Illinois-based Abbott has approximately 5,000 employees in Minnesota. That will grow with the addition of CSI.
"We're off to a very good start for the year," Ford said.
