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Abbott Laboratories (ABT - Analyst Report) is scheduled to report third quarter 2013 results before the opening bell on Oct 16, 2013.

Last quarter, Abbott Labs posted a 4.55% positive surprise. Let’s see how things are shaping up for the third quarter. 

Factors to Influence 3Q Results?

Abbott Labs is an extremely diversified company with a presence in the diagnostics, nutrition, generics and medical devices markets after having separated its pharmaceutical business into a new company called AbbVie (ABBV - Analyst Report) in Jan 2013.

However, the business environment continues to be challenging in 2013 due to austerity measures in developed markets and weak economic conditions elsewhere in the world. We believe the pricing pressure in the EU and health care reforms in the U.S. will continue to have a negative impact on sales.

Abbott Labs’ Established Pharmaceuticals Division (EPD) continues to be impacted by lower-than-expected growth in Europe and the emerging markets. Hence, Abbott Labs now expects a declaration in pace of growth in this segment for the remainder of 2013.

Nevertheless, we expect the Nutrition and Diagnostics divisions to somewhat offset the decline in other segments.

Earnings Whispers?

Our proven model does not conclusively show that Abbott Labs is likely to beat the Zacks Consensus Estimate in the third quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy) or at least 2 or 3 for this to happen. Unfortunately, this is not the case here as elaborated below.

Negative Zacks ESP: The Earnings ESP for Abbott Labs is -1.92%.  This is because the Most Accurate estimate stands at $0.51 while the Zacks Consensus Estimate is higher at $0.52.

Zacks Rank: Abbott Labs carries a Zacks Rank #3 (Hold), which increases the predictive power of ESP. That said we also need to have a positive ESP to be confident of an earnings beat.

We caution against stocks with Zacks Ranks #4 and #5 (Sell rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revision momentum.

Stocks to Consider

Here are some other stocks you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this season: 

Eli Lilly and Company (LLY - Analyst Report) has Earnings ESP of +1.92% and holds a Zacks Rank #3 (Hold). Eli Lilly will be reporting third quarter earnings on Oct 23. 

Biogen Idec. has Earnings ESP of +0.91% and holds a Zacks Rank #2 (Buy). Biogen will be reporting third quarter earnings on Oct 28.

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