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Why Is Abbott Laboratories (ABT) Down 3.1% Since the Last Earnings Report?
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It has been about a month since the last earnings report for Abbott Laboratories (ABT - Free Report) . Shares have lost about 3.1% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Q2 Earnings
Abbott reported second-quarter 2017 adjusted earnings from continuing operations of $0.62 per share, 3.3% higher than the Zacks Consensus Estimate and up 12.7% year over year. This adjusted quarterly number also remained ahead of the company’s guidance range of $0.59 to $0.61.
Reported earnings for the quarter came in at $0.15 per share, way below the year-ago number of $0.40.
Second-quarter worldwide sales came in at $6.63 billion, up 24.4% year over year on a reported basis. This quarterly figure also marginally in line with the Zacks Consensus Estimate of $6.62 billion.
On a comparable operational basis (adjusting the impact of foreign exchange, certain acquisitions and divestments), sales increased 2.9% year over year in the reported quarter.
Quarter in Detail
Abbott Labs operates through four segments – Established Pharmaceuticals Division (EPD), Medical Devices, Nutrition and Diagnostics.
EPD sales were up 4.1% on a reported basis (up 3.5% on comparable operational basis) to $1,021 billion. There was a positive impact of 0.6% on the back of currency fluctuations. Sales in key emerging markets increased 5.8% (up 4.6%), driven by strong growth in Russia, China and several countries across Latin America. However, this positive effect was partially offset by the impact associated with implementation of a new Goods and Services Tax (GST) system in India.
The Medical Devices business sales spiked 89.2% on a reported basis to $2.59 billion. However, on a comparable operational basisexcluding the impact from the favorable resolution of a third-party royalty agreement last year, sales increased 3.2%.
Cardiovascular and Neuromodulation sales soared 189% on a reported basis (up 0.9% on comparable operational basis) on growth in Electrophysiology, Structural Heart and Neuromodulation. Vascular product sales were up 6%, while Structural Heart business grew 9.1% year over yearon a comparable operational basis.
Diabetes Care sales improved 18.7% on a reported basis (up 21.3%), driven by double-digit international sales growth, led by continued consumer uptake of FreeStyle Libre — the revolutionary continuous glucose monitoring system of Abbott Labs.
Nutrition sales slipped 0.6% year over year on a reported basis (up 0.5% on a comparable operational basis). Unfavorable foreign exchange impacted sales by a marginal 1.1%. Pediatric Nutrition sales increased 2.5% on a comparable operational basis. Adult Nutrition sales however, decreased 2% on a comparable operational basis.
Diagnostics sales rose 3.8% year over year (up 5.4% on a comparable operational basis). While Core Laboratory sales increased 6.1%, Point of Care Diagnostics sales grew 8.9%, both on a comparable operational basis. Molecular Diagnostics sales were down 4.1% as strong growth in the infectious disease testing business was partially offset by the planned scale-down of the genetics business.
2017 Guidance
Abbott Labs raised its full-year 2017 guidance. The company forecasts earnings per share from continuing operations to remain within the range of $1.03 to $1.13 from earlier range of $0.92 to $1.02. Adjusting certain net specified items for the full year, the adjusted earnings per share from continuing operations are expected to stay within a band of $2.43-$2.53 (earlier guidance was $2.40-$2.50). The current Zacks Consensus Estimate is pegged at $2.47, at the midpoint of the projected range.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
At this time, Abbott Laboratories' stock has a nice Growth Score of B, though it is lagging a bit on the momentum front with a C. Charting a similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for growth investors than value and momentum investors.
Outlook
Notably, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.
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Why Is Abbott Laboratories (ABT) Down 3.1% Since the Last Earnings Report?
It has been about a month since the last earnings report for Abbott Laboratories (ABT - Free Report) . Shares have lost about 3.1% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Q2 Earnings
Abbott reported second-quarter 2017 adjusted earnings from continuing operations of $0.62 per share, 3.3% higher than the Zacks Consensus Estimate and up 12.7% year over year. This adjusted quarterly number also remained ahead of the company’s guidance range of $0.59 to $0.61.
Reported earnings for the quarter came in at $0.15 per share, way below the year-ago number of $0.40.
Second-quarter worldwide sales came in at $6.63 billion, up 24.4% year over year on a reported basis. This quarterly figure also marginally in line with the Zacks Consensus Estimate of $6.62 billion.
On a comparable operational basis (adjusting the impact of foreign exchange, certain acquisitions and divestments), sales increased 2.9% year over year in the reported quarter.
Quarter in Detail
Abbott Labs operates through four segments – Established Pharmaceuticals Division (EPD), Medical Devices, Nutrition and Diagnostics.
EPD sales were up 4.1% on a reported basis (up 3.5% on comparable operational basis) to $1,021 billion. There was a positive impact of 0.6% on the back of currency fluctuations. Sales in key emerging markets increased 5.8% (up 4.6%), driven by strong growth in Russia, China and several countries across Latin America. However, this positive effect was partially offset by the impact associated with implementation of a new Goods and Services Tax (GST) system in India.
The Medical Devices business sales spiked 89.2% on a reported basis to $2.59 billion. However, on a comparable operational basisexcluding the impact from the favorable resolution of a third-party royalty agreement last year, sales increased 3.2%.
Cardiovascular and Neuromodulation sales soared 189% on a reported basis (up 0.9% on comparable operational basis) on growth in Electrophysiology, Structural Heart and Neuromodulation. Vascular product sales were up 6%, while Structural Heart business grew 9.1% year over yearon a comparable operational basis.
Diabetes Care sales improved 18.7% on a reported basis (up 21.3%), driven by double-digit international sales growth, led by continued consumer uptake of FreeStyle Libre — the revolutionary continuous glucose monitoring system of Abbott Labs.
Nutrition sales slipped 0.6% year over year on a reported basis (up 0.5% on a comparable operational basis). Unfavorable foreign exchange impacted sales by a marginal 1.1%. Pediatric Nutrition sales increased 2.5% on a comparable operational basis. Adult Nutrition sales however, decreased 2% on a comparable operational basis.
Diagnostics sales rose 3.8% year over year (up 5.4% on a comparable operational basis). While Core Laboratory sales increased 6.1%, Point of Care Diagnostics sales grew 8.9%, both on a comparable operational basis. Molecular Diagnostics sales were down 4.1% as strong growth in the infectious disease testing business was partially offset by the planned scale-down of the genetics business.
2017 Guidance
Abbott Labs raised its full-year 2017 guidance. The company forecasts earnings per share from continuing operations to remain within the range of $1.03 to $1.13 from earlier range of $0.92 to $1.02. Adjusting certain net specified items for the full year, the adjusted earnings per share from continuing operations are expected to stay within a band of $2.43-$2.53 (earlier guidance was $2.40-$2.50). The current Zacks Consensus Estimate is pegged at $2.47, at the midpoint of the projected range.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
Abbott Laboratories Price and Consensus
Abbott Laboratories Price and Consensus | Abbott Laboratories Quote
VGM Scores
At this time, Abbott Laboratories' stock has a nice Growth Score of B, though it is lagging a bit on the momentum front with a C. Charting a similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for growth investors than value and momentum investors.
Outlook
Notably, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.