Abbott Laboratories ABT is
slated to report first-quarter 2019 results on Apr 17, before the
market opens. In the last reported quarter, the companyâs earnings
per share of 81 cents are in line with Zacks Consensus Estimate.
However, Abbott delivered positive surprises in three of the
trailing four quarters, the average beat being 1.47%.
Let's see, how things are shaping up for this
Factors at Play
Over the last few quarters, Abbott has been
riding high on a healthy growth curve within its Diabetes Care
business. The company has been hogging the limelight for
developments in the flagship, sensor-based continuous glucose
monitoring (CGM) system â FreeStyle Libre System.
At the end of 2018, the company provided some
encouraging data, boosting investorsâ sentiment around Abbottâs
Diabetes Care segment. The company reported global sales of more
than $1 billion from FreeStyle Libre System in 2018, reflecting a
100% increase on a year-over-year basis. In the fourth quarter
alone, this business segment added 300,000 users and as of 2018
end, there were 1.3 million active users worldwide, of which
approximately two-thirds are type 1 diabetics and one-third is type
Meanwhile, the company recently initiated the
launch of Libre 2.0 in Europe. While it is leaving no stone
unturned to advance within its Diabetes Care segment, the upbeat
trend firmly indicates another strong quarter of promising top-line
numbers for this segment.
The Zacks Consensus Estimate of $537 million for
Diabetes Care revenues indicates a rise of 27.6% from the year-ago
Abbott Laboratories Price and EPS
Abbott Laboratories Price and EPS Surprise |
Abbott Laboratories Quote
In sync with the prior reported quarter, Abbott
is anticipated to gain from a strong performance by the Established
Pharmaceuticals Division (EPD) business, which has been recording
operational sales growth over the last few quarters. According to
Abbott, its EPD business is growing at a faster pace than the
market rate across several of its priority countries including
India and China. Management expects mid-single-digit growth within
EPD in the first quarter, comprising mid-to-high single-digit
growth in the priority key emerging markets along with a modest
decline in other EPD sales, which reflects the recent
discontinuation of a non-core low margin third-party supply
Currently, the Zacks Consensus Estimate of $1.04
billion for EPD revenues shows a 3.9% slip from the year-earlier
We are optimistic about the consistently sturdy
Diagnostics business, courtesy of solid contributions from all
sub-segments, namely Core Laboratories Diagnostics, Molecular
Diagnostics and Point of Care. We are impressed by the accelerated
pace of the companyâs Alinity launch in Europe, driven by strong
competitive win rates and even more robust retention rates. This
business is growing more rapidly than its market rate. Per Abbott,
it is well-positioned for sustainable growth in years to come based
on the companyâs rollout of the full suite of Alinity systems
across additional geographies including the United States.
Within Rapid Diagnostics, in 2018, the company
achieved its sales and synergy targets and is pleased with the
progress of the integration of this business. However, from the
first quarter of 2019, this business will be included in the
companyâs organic sales growth results and is expected to be
relatively flat in the first quarter, reflecting the difficult flu
The Zacks Consensus Estimate of $1.83 billion for
Diagnostic revenues depicts a 0.4% improvement from the figure
registered in the comparable quarter last year.
We also encouragingly note that Nutrition is
Abbottâs most speedily-growing business owing to aging population,
increasing rate of chronic diseases and the rise of the middle
class in the emerging markets. Furthermore, Abbottâs pediatric
nutrition business continues to thrive in the United States. For
the first quarter, the company currently projects low to
mid-single-digit sales growth.
What the Model Suggests
Our proven Zacks model clearly shows that a
company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has
significant chances of beating estimates if it also has a positive
Earnings ESP. You can uncover the best stocks to buy or sell before
theyâre reported with our Earnings ESP Filter.
Abbott has a Zacks Rank #3, which increases the
predictive power of ESP. However, an Earnings ESP of 0.00% in the
combination makes surprise prediction difficult for the stock this
reporting cycle. The Zacks Consensus Estimate for the bottom line
of 61 cents translates to a 3.4% rise year over year.
Stocks Worth a Look
Here are a few medical stocks worth considering
from the same space as these comprise the right mix of elements to
surpass expectations this time around.
Cerner Corporation CERN has an Earnings ESP of
+1.05% and a Zacks Rank #2. You can see the complete list
of today's Zacks #1 Rank stocks here.
Thermo Fisher Scientific Inc. TMO has an Earnings
ESP of +0.26% and a Zacks Rank of 2.
GW Pharmaceuticals plc GWPH has an Earnings ESP
of +8.33% and is a Zacks #2 Ranked player.
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