Abbott Laboratories

Good morning, and thank you for standing by. Welcome to Abbott's second quarter 2021 earnings conference call. All participants will be able to listen only until the question and answer portion of this call. During the question and answer session, you will be able to ask your question by pressing the star one keys on your touchtone phone. Should you become disconnected throughout this conference call, please redial the number provided to you and reference the Abbott earnings call. This call is being recorded by Abbott. With the exception of any participants' questions asked during the question and answer session, the entire call, including the question and answer session, is material copyrighted by Abbott. It cannot be recorded or rebroadcast without Abbott's express written permission. I would now like to introduce Mr. Scott Leinenweber, Vice President, Investor Relations, Licensing and Acquisitions.

Scott Leinenweber Good morning, and thank you for joining us. With me today are Robert Ford, President and Chief Executive Officer, and Bob Funk, Executive Vice President, Finance and Chief Financial Officer. Robert and Bob will provide opening remarks. Following their comments, we'll take your questions. Before we get started, some statements made today may be forward-looking for purposes of the Private Securities Litigation Reform Act of 1995, including the expected financial results for 2021. AVID cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated in the forward-looking statements. Economic, competitive, governmental, technological, and other factors that may affect AVID's operations are discussed in Item 1A, Risk Factors, to our annual report on Form 10-K for the year ended December 31, 2020. Abbott undertakes no obligation to release publicly any revisions to forward-looking statements as a result of subsequent events or developments, except as required by law. On today's conference call, as in the past, non-GAAP financial measures will be used to help investors understand Abbott's ongoing business performance. These non-GAAP financial measures are reconciled with the comparable GAAP financial measures in our earnings news release and regulatory filings from today which are available at our website at Abbott.com. Unless otherwise noted, our commentary for sales growth refers to organic sales growth, which excludes the impact of foreign exchange. With that, I will now turn the call over to Robert.

Thanks, Scott. Good morning, everyone, and thank you for joining us. Today, we reported results of a very strong quarter. Ongoing earnings per share were $1.17, reflecting more than 100% growth compared to the prior year. Sales increased 35% on an organic basis in the quarter compared to last year. Given the significant negative impact COVID had on demand for elective medical procedures and routine diagnostic testing last year, comparing sales versus pre-pandemic levels in 2019 provides one of the more relevant measures of performance. On this comparison, excluding sales from our COVID testing business, organic sales grew nearly 11.5% in the second quarter, driven by strong sales growth across all four of our major businesses, including double-digit growth in established pharmaceuticals, nutrition, and medical devices. I'll now summarize our second quarter results before turning over the call to Bob. And I'll start with nutrition, where sales increased 9.5% compared to last year. Strong growth in the quarter was led by mid-teens growth in adult nutrition, including more than 20% growth internationally. Since the beginning of the pandemic, we've seen two factors positively impact adult nutrition demand. New users are entering the category, and existing customers have increased their usage. And as the global market leader, these dynamics are driving strong growth for our Ensure and Glucerna brands. In pediatric nutrition, sales grew nearly 4.5% in the quarter, led by growth of nearly 9% in the US, where we continue to capture share with our leading portfolio of infant formula and toddler brands. Sales of Pedialyte Our global rehydration brand grew strong double digits, driven by recently launched new products and increased investments we're making in direct consumer promotion. Turning to diagnostics, sales increased more than 55%, which includes $1.3 billion of COVID testing-related sales. Excluding COVID testing-related sales, underlying diagnostic sales increased 37% compared to last year. Strong sales growth in our underlying diagnostic business is being driven by improving routine diagnostic testing as healthcare systems continue to recover from the pandemic, as well as the continued rollout of our Linity platforms. Excluding COVID testing-related sales, Second quarter sales in core laboratory and molecular diagnostics grew mid-single digits compared to pre-pandemic levels in the second quarter of 2019. Moving to established pharmaceuticals, where sales grew nearly 15% in the quarter. Strong sales performance in the quarter was broad-based across several countries, including double-digit growth in India, China, Russia, and Brazil, which led to overall sales growth of nearly 18.5% in our key emerging markets. While we continue to see COVID cases surge in several emerging markets, including the recent surge in India, our team is executing at a high level to meet market demand for our medicines. And lastly, I'll cover medical devices, where sales grew 45% in the quarter compared to last year, and more than 15.5% compared to the second quarter of 2019. Strong growth in the quarter was led by structural heart, electrophysiology, heart failure, and diabetes care, all of which grew double digits compared to the second quarter of 2019. In structural heart, we achieved the highest number of MitraClip procedures ever in the second quarter, including a record number of procedures in the month of June. And I'll wrap up with diabetes care. where strong growth was led by Freestyle Libre sales of more than $900 million. The global user base for Libre grew to approximately 3.5 million users, including approximately 1 million users in the U.S., driven by market expansion and awareness efforts, as well as ongoing new product launch activity in every major market around the world. So in summary, we're achieving strong growth across all four of our major businesses. Particularly pleased with the strong momentum and growth contributions we're seeing from several recently launched products and investments we're making in our key growth platforms. And our new product pipeline continues to be incredibly productive, delivering a steady cadence of new products with more to come over the next several months. I'll now turn over the call to Bob to discuss our results and outlook for the full year in more detail.