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Can Diagnostics Business Drive Abbott's (ABT) Q4 Earnings?
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Abbott’s (ABT - Free Report) Diagnostics business has been on a growth trajectory of late on solid contributions from all sub-segments — Core Laboratories Diagnostics, Molecular Diagnostics and Point of Care. We expect this strength to get reflected in fourth-quarter 2017 results, which are scheduled for release on Jan 24.
Core Laboratories Diagnostics
In June 2017, Abbott announced the CE Mark for Alinity hq, which has become the fifth diagnostic system to be launched in Europe along with the ongoing rollout of four instruments in the areas of immunoassay, clinical chemistry, blood screening and point of care. This has strengthened the company’s Core Laboratory Diagnostics business considerably.
Of late, the company has been in the headlines following the receipt of CE Mark and commercial launch of Alinity h-series integrated system for hematology testing. Notably, the Alinity portfolio covers clinical chemistry, immunoassay, blood and plasma screening, point of care, hematology and molecular diagnostics along with Abbott's AlinIQ. Interestingly, the company also continued the initial launch of certain new Alinity systems for the core laboratory, including "Alinity c" for clinical chemistry, "Alinity i" for immunoassay diagnostics and "Alinity s" for blood and plasma screening globally during the last reported third quarter.
Continuing with the slew of developments, this Illinois-based global medical device company signed a $252-million managed equipment service contract with North West London Pathology (NWLP), hosted by Imperial College Healthcare NHS Trust in August 2017. Per the terms of the collaboration, Abbott will be the authorized supplier of all analytical equipment and consumables, covering its Alinity ci and Alinity h series diagnostics instruments and AlinIQ. Per NWLP, the alliance, which presently covers 6% of the pathology market in the U.K., is expected to carry out 26 million tests per year. Thus, investors must be eagerly looking forward to the outcome of this deal on the company’s financials. The Zacks Consensus Estimate for Core Laboratory Diagnostics revenues of $1.05 billion indicates a rise of 4.9% from the year-ago quarter reported number.
Abbott’s successful closure of the Alere acquisition after a prolonged legal battle has instilled confidence in investors. The buyout closed in October 2017 under amended financial terms in favor of Abbott. Taking the attractive prospects of Point of Care testing within the in vitro diagnostics market into consideration, Abbott is highly optimistic about the Alere integration. According to the company, the Alere buyout will significantly expand its diagnostics presence and create the broadest Point of Care testing portfolio with strong positions in cardio, metabolic, infectious disease and toxicology testing. Moreover, Abbott expects Alere to contribute around $475 million to its top line in 2017. Thus, the Zacks Consensus Estimate for Point of Care revenues of $661 million indicates a massive rise of 389.6% from the year-ago quarter and a surge of 404.6% from the sequential quarter.
Molecular Diagnostics
Through 2017, Abbott has effectively focused on core areas and thus, the company has been strongly performing in the infectious disease testing business under Molecular Diagnostics. This has been partially offsetting declines due to planned scale down in other testing areas by the company. The Zacks Consensus Estimate for Molecular Diagnostics revenues of $122 million indicates a rise of 4.3% from the year-ago quarter.
With these positives in place, Abbott anticipates mid-single digit increase in Diagnostics sales in fourth-quarter 2017.
Here is what our quantitative model predicts:
Abbott does not have the right combination of two main ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher — for increasing the odds of an earnings beat.
Zacks ESP: The Earnings ESP for Abbott is -0.62%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Abbott carries a Zacks Rank #3, which increases the predictive power of ESP. However, we also need to have a positive ESP to be confident of a positive earnings surprise.
The Zacks Consensus Estimate for earnings of 73 cents reflects a 12.3% rise on a year-over-year basis.
Stocks Worth a Look
Here are a few medical stocks worth considering as they have the right combination of elements to post an earnings beat this quarter.
Myriad Genetics, Inc. (MYGN - Free Report) has an Earnings ESP of +0.42% and a Zacks Rank #3.
Henry Schein, Inc. (HSIC - Free Report) has an Earnings ESP of +0.35% and a Zacks Rank #3.
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With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
Can Diagnostics Business Drive Abbott's (ABT) Q4 Earnings?
Abbott’s (ABT - Free Report) Diagnostics business has been on a growth trajectory of late on solid contributions from all sub-segments — Core Laboratories Diagnostics, Molecular Diagnostics and Point of Care. We expect this strength to get reflected in fourth-quarter 2017 results, which are scheduled for release on Jan 24.
Core Laboratories Diagnostics
In June 2017, Abbott announced the CE Mark for Alinity hq, which has become the fifth diagnostic system to be launched in Europe along with the ongoing rollout of four instruments in the areas of immunoassay, clinical chemistry, blood screening and point of care. This has strengthened the company’s Core Laboratory Diagnostics business considerably.
Of late, the company has been in the headlines following the receipt of CE Mark and commercial launch of Alinity h-series integrated system for hematology testing. Notably, the Alinity portfolio covers clinical chemistry, immunoassay, blood and plasma screening, point of care, hematology and molecular diagnostics along with Abbott's AlinIQ. Interestingly, the company also continued the initial launch of certain new Alinity systems for the core laboratory, including "Alinity c" for clinical chemistry, "Alinity i" for immunoassay diagnostics and "Alinity s" for blood and plasma screening globally during the last reported third quarter.
Continuing with the slew of developments, this Illinois-based global medical device company signed a $252-million managed equipment service contract with North West London Pathology (NWLP), hosted by Imperial College Healthcare NHS Trust in August 2017. Per the terms of the collaboration, Abbott will be the authorized supplier of all analytical equipment and consumables, covering its Alinity ci and Alinity h series diagnostics instruments and AlinIQ. Per NWLP, the alliance, which presently covers 6% of the pathology market in the U.K., is expected to carry out 26 million tests per year. Thus, investors must be eagerly looking forward to the outcome of this deal on the company’s financials. The Zacks Consensus Estimate for Core Laboratory Diagnostics revenues of $1.05 billion indicates a rise of 4.9% from the year-ago quarter reported number.
Abbott Laboratories Price and EPS Surprise
Abbott Laboratories Price and EPS Surprise | Abbott Laboratories Quote
Point of Care
Abbott’s successful closure of the Alere acquisition after a prolonged legal battle has instilled confidence in investors. The buyout closed in October 2017 under amended financial terms in favor of Abbott. Taking the attractive prospects of Point of Care testing within the in vitro diagnostics market into consideration, Abbott is highly optimistic about the Alere integration. According to the company, the Alere buyout will significantly expand its diagnostics presence and create the broadest Point of Care testing portfolio with strong positions in cardio, metabolic, infectious disease and toxicology testing. Moreover, Abbott expects Alere to contribute around $475 million to its top line in 2017. Thus, the Zacks Consensus Estimate for Point of Care revenues of $661 million indicates a massive rise of 389.6% from the year-ago quarter and a surge of 404.6% from the sequential quarter.
Molecular Diagnostics
Through 2017, Abbott has effectively focused on core areas and thus, the company has been strongly performing in the infectious disease testing business under Molecular Diagnostics. This has been partially offsetting declines due to planned scale down in other testing areas by the company. The Zacks Consensus Estimate for Molecular Diagnostics revenues of $122 million indicates a rise of 4.3% from the year-ago quarter.
With these positives in place, Abbott anticipates mid-single digit increase in Diagnostics sales in fourth-quarter 2017.
Here is what our quantitative model predicts:
Abbott does not have the right combination of two main ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher — for increasing the odds of an earnings beat.
Zacks ESP: The Earnings ESP for Abbott is -0.62%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Abbott carries a Zacks Rank #3, which increases the predictive power of ESP. However, we also need to have a positive ESP to be confident of a positive earnings surprise.
The Zacks Consensus Estimate for earnings of 73 cents reflects a 12.3% rise on a year-over-year basis.
Stocks Worth a Look
Here are a few medical stocks worth considering as they have the right combination of elements to post an earnings beat this quarter.
Bio-Rad Laboratories, Inc. (BIO - Free Report) has an Earnings ESP of +4.45% and a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Myriad Genetics, Inc. (MYGN - Free Report) has an Earnings ESP of +0.42% and a Zacks Rank #3.
Henry Schein, Inc. (HSIC - Free Report) has an Earnings ESP of +0.35% and a Zacks Rank #3.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>