(Bloomberg) -- Abbott Laboratories fell after the company warned that profits for the year would be lower than expected as demand for Covid-19 testing erodes.
The health-care company said on Tuesday it expects full-year adjusted earnings from continuing operations to range from $4.30 a share to $4.50. In January, the company forecast at least $5 per share. Abbott’s stock fell 5.6% to $09.83 at 9:47 a.m. in New York trading.
Abbott had hoped to maintain sales with the release of BinaxNOW for over-the-counter sale and home use. But testing is declining in the U.S. as vaccination rates grow, infections wane and pandemic restrictions loosen. In April, U.S. health officials said fully vaccinated individuals don’t need a test, though they were advised to continue wearing masks in certain circumstances and to avoid crowds.
“We’ve recently seen a rapid decline in Covid-19 testing demand and anticipate this trend will continue,” said Robert Ford, Abbott’s chief executive officer, in a statement.
Predicting Covid-19 testing needs after a year spent rapidly expanding capacity has proven challenging for test makers and providers. Early this year, laboratory giant Laboratory Corp of America Holdings said that testing demand could decline by as much as half this year. Rival Quest Diagnostics Inc., meanwhile, in late April only provided guidance for the first half of the year, and the company’s executives warned that they expect declining virus testing demand in the latter part of the year.
Abbott benefited earlier in the pandemic from rising demand for Covid screening, but its shares have been falling of late, declining some 9% from a 52-week high reached on Feb. 12 through Friday’s close.
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