Income Statement
The income statement presents information on the financial results of a company business activities over a period of time. The income statement communicates how much revenue the company generated during a period and what cost it incurred in connection with generating that revenue.
Abbott Laboratories, consolidated income statement
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The analysis of the annual financial data reveals several noteworthy trends in key financial metrics over the five-year period ending December 31, 2024.
- Net Sales
- Net sales demonstrated a strong upward trajectory from 2020 to 2022, increasing from $34,608 million to a peak of $43,653 million. However, in 2023, sales declined to $40,109 million before partially recovering to $41,950 million in 2024. This indicates some volatility in the company's revenue generation after 2022.
- Cost of Products Sold
- The cost of products sold, excluding amortization of intangible assets, consistently increased from $15,003 million in 2020 to $19,142 million in 2022. A reduction occurred in 2023 to $17,975 million, followed by an increase to $18,706 million in 2024. Amortization of intangible assets steadily decreased from $2,132 million in 2020 to $1,878 million in 2024, showing effective management of amortization expenses.
- Gross Profit
- Gross profit initially rose considerably from $17,473 million in 2020 to $22,498 million in 2022, aligning with the rise in net sales despite increased costs. Thereafter, gross profit declined to $20,168 million in 2023, then recovered slightly to $21,366 million in 2024, mirroring the pattern seen in net sales and cost controls.
- Research and Development
- R&D expenses increased from $2,420 million in 2020 to $2,888 million in 2022, followed by a slight decline in 2023 to $2,741 million, and then a modest rise to $2,844 million in 2024. This suggests sustained investment in innovation and development despite fluctuations in operating income.
- Selling, General, and Administrative Expenses
- SG&A expenses rose steadily from $9,696 million in 2020 to $11,324 million in 2021, then slightly decreased in 2022 and 2023, only to increase again to $11,697 million in 2024. The general upward trend indicates ongoing operational expenditure pressure consistent with business scale and market dynamics.
- Operating Earnings
- Operating earnings exhibited a strong increase from $5,357 million in 2020 to $8,425 million in 2021, followed by a slight dip in 2022 to $8,362 million and a more marked decline in 2023 to $6,478 million. A partial recovery to $6,825 million in 2024 was observed, reflecting the impact of sales fluctuations and cost management.
- Interest Expense and Income
- Interest expense remained relatively stable with a slight increase peaking at $637 million in 2023, then decreasing to $559 million in 2024. Interest income showed a notable increase from $46 million in 2020 to $385 million in 2023, before slightly decreasing to $344 million in 2024, suggesting improved returns on invested cash or financial assets.
- Net Foreign Exchange Gain (Loss)
- Foreign exchange effects were minimal overall, fluctuating between small gains and losses, with a significant loss of $41 million in 2023 and a gain of $27 million in 2024, indicating some currency exposure risk but limited impact on results.
- Other Income, Net
- Other income increased consistently from $103 million in 2020 to $479 million in 2023, followed by a slight decrease to $376 million in 2024, contributing positively to pre-tax earnings.
- Earnings from Continuing Operations Before Taxes
- Pre-tax earnings from continuing operations mirrored operating earnings, rising sharply from $4,968 million in 2020 to $8,306 million in 2022, then declining to $6,664 million in 2023 and modestly increasing to $7,013 million in 2024.
- Taxes on Earnings
- The tax expenses showed an atypical pattern, increasing from $497 million in 2020 to $1,373 million in 2022, then declining in 2023 to $941 million, but reversing dramatically to a tax benefit (negative tax expense) of $6,389 million in 2024. This significant tax benefit in 2024 is an anomaly that substantially affects net earnings.
- Earnings from Continuing Operations and Net Earnings
- Net earnings from continuing operations increased significantly from $4,471 million in 2020 to $7,071 million in 2021, then slightly decreased to $6,933 million in 2022 and $5,723 million in 2023. In 2024, earnings surged to $13,402 million due primarily to the substantial tax benefit recorded. Overall net earnings followed the same pattern, with no recorded discontinued operations after 2020.
In summary, the data indicate growth in sales and gross profit until 2022, followed by a period of decline and partial recovery. Operating earnings show a similar trend with pressures from higher operating expenses and fluctuating costs. The 2024 year is distinguished by an exceptional tax benefit, causing a sharp increase in net earnings despite moderate improvements in operational performance. Ongoing investments in R&D and controlled amortization expenses highlight focus areas for the company despite market and operational volatility.