(This April 19 story has been corrected to say Third Bridge is an "investment research firm", not "investment consulting firm", in paragraph 9)
By Khushi Mandowara and Leroy Leo
(Reuters) - Abbott Laboratories (NYSE:ABT) said on Wednesday most delayed non-urgent medical procedures had resumed globally three years into the COVID-19 pandemic as hospital staff shortages eased and customers became regular with check-ups, sending shares up 7%.
The much-awaited recovery in elective surgeries led the company to effectively raise forecast for its core business, even as COVID testing-related sales were seen falling sharply.
The company is the second major medical device maker to signal a recovery after rival Johnson & Johnson (NYSE:JNJ) on Tuesday posted better-than-expected sales for the business.
Abbott's upbeat commentary lifted shares of other medical device makers Medtronic (NYSE:MDT), Stryker (NYSE:SYK), Zimmer Biomet and Boston Scientific Corp (NYSE:BSX) by 2%-4% in morning trade.
Abbott's stronger outlook for its non-COVID business was the main takeaway as investors had priced in a fall in COVID testing sales, J.P. Morgan analyst Robbie Marcus said in a note.
The Illinois-based company lowered its outlook for COVID testing sales this year to $1.5 billion from the $2 billion it forecast in January, but retained its annual adjusted profit outlook at $4.30-$4.50 per share, indicating growth in its non-COVID core business, including medical devices.
"I think it is sustainable. I don't think it's a bolus of backlog," Abbott CEO Robert Ford said about the recovery in its core business.
Medical devices - Abbott's largest segment - clocked an 8.5% rise in sales to $3.90 billion, with $1.2 billion coming from glucose monitoring device Freestyle Libre. Analysts had estimated sales of $3.77 billion for the unit, according to Refinitiv data.
Still, George Congdon, an analyst with investment research firm Third Bridge, was skeptical. "I wouldn't read too much into one quarter of U.S. volume recoveries."
Staffing issues are now widespread in the U.S. hospitals, and could take a couple of years to fully wane, he said.
Abbott reported an adjusted profit of $1.03 per share, higher than analysts' average estimate of 99 cents.