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Can Abbott's (ABT) Steady Overall Growth Aid Q3 Earnings?
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Abbott Laboratories (ABT - Free Report) is slated to report third-quarter 2018 results before the market opens on Oct 17. Last reported quarter, the company’s earnings per share exceeded the Zacks Consensus Estimate by 2.8%. Moreover, Abbott delivered positive surprises in the trailing four quarters, the average beat being 1.86%.
Let's see how things are shaping up for this announcement.
Factors at Play
Over the past 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 — FreeStyle Libre System. Per a recent data, the number of Libre users now has crossed 650,000 across the globe, representing an unprecedented level of patient adoption in the industry. This has firmly boosted the company’s top-line numbers in the recent quarters (growth of over 30% for the last three consecutive quarters).
This momentum should continue through the third quarter too, producing impressive results in the period. The company expects to see significant growth contributions from a line of recently launched products across the portfolio. The Zacks Consensus Estimate of $481 million for Diabetes Care revenues indicates an increase of 28.9% from the year-ago quarter’s level.
In sync with the prior 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-to-high single-digit sales growth during the third quarter 2018, considering the company’s year-ago quarter’s results, which were impacted by the implementation of the new tax system in India. The Zacks Consensus Estimate of $1.23 billion for EPD revenues shows a 4.6% rise from the year-earlier period’s number.
We are also upbeat about the consistently sturdy Diagnostics business, courtesy of solid contributions from all sub-segments, namely Core Laboratories Diagnostics, Molecular Diagnostics and Point of Care. Moreover, synergies drawn from the Alere buyout in the form of revenues from Rapid Diagnostics have been benefiting the company.
This apart, we are impressed by the accelerated pace of the company’s Alinity launch in Europe, driven by strong competitive win rates and even stronger retention rates. This business is growing more rapidly than its market rate. Per Abbott, it is well-positioned for sustainable growth for years to come based on the company’s rollout of the full suite of Alinity systems across additional geographies including the United States.
Additionally, management estimates Rapid Diagnostics to contribute more than $2 billion in 2018. The Zacks Consensus Estimate for Core Laboratory Diagnostic revenues of $1.83 billion depicts a 42.7% improvement from the registered figure in the comparable quarter last year.
We encouragingly note that Nutrition is Abbott’s 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, Abbott’s pediatric nutrition business continues to be robust in the United States. Thus, the Zacks Consensus Estimate of $1.82 billion for Nutrition revenues translates into a 2.9% rise from the year-ago quarter’s figure.
Overall, third-quarter total revenues are projected at $7.67 billion, up 12.3% from the prior-year period’s tally.
What the Model Suggests
Per the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has good chances of beating estimates if it also has a positive Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Abbott has a Zacks Rank #3, which increases the predictive power of ESP and an Earnings ESP of +0.49%. This combination suggests that the company is likely to beat on earnings this reporting season. The Zacks Consensus Estimate for bottom line of 74 cents reflects 12.1% growth year over year.
Other Stocks Worth a Look
Here are a few other medical stocks worth considering from the same space as these too comprise the right combination of elements to beat on earnings this time around.
DaVita Inc. (DVA - Free Report) has an Earnings ESP of +2.41% and a Zacks Rank #2.
Masimo Corporation (MASI - Free Report) has an Earnings ESP of +0.98% and a Zacks Rank of 2.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Can Abbott's (ABT) Steady Overall Growth Aid Q3 Earnings?
Abbott Laboratories (ABT - Free Report) is slated to report third-quarter 2018 results before the market opens on Oct 17. Last reported quarter, the company’s earnings per share exceeded the Zacks Consensus Estimate by 2.8%. Moreover, Abbott delivered positive surprises in the trailing four quarters, the average beat being 1.86%.
Let's see how things are shaping up for this announcement.
Factors at Play
Over the past 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 — FreeStyle Libre System. Per a recent data, the number of Libre users now has crossed 650,000 across the globe, representing an unprecedented level of patient adoption in the industry. This has firmly boosted the company’s top-line numbers in the recent quarters (growth of over 30% for the last three consecutive quarters).
This momentum should continue through the third quarter too, producing impressive results in the period. The company expects to see significant growth contributions from a line of recently launched products across the portfolio. The Zacks Consensus Estimate of $481 million for Diabetes Care revenues indicates an increase of 28.9% from the year-ago quarter’s level.
Abbott Laboratories Price and EPS Surprise
Abbott Laboratories Price and EPS Surprise | Abbott Laboratories Quote
In sync with the prior 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-to-high single-digit sales growth during the third quarter 2018, considering the company’s year-ago quarter’s results, which were impacted by the implementation of the new tax system in India. The Zacks Consensus Estimate of $1.23 billion for EPD revenues shows a 4.6% rise from the year-earlier period’s number.
We are also upbeat about the consistently sturdy Diagnostics business, courtesy of solid contributions from all sub-segments, namely Core Laboratories Diagnostics, Molecular Diagnostics and Point of Care. Moreover, synergies drawn from the Alere buyout in the form of revenues from Rapid Diagnostics have been benefiting the company.
This apart, we are impressed by the accelerated pace of the company’s Alinity launch in Europe, driven by strong competitive win rates and even stronger retention rates. This business is growing more rapidly than its market rate. Per Abbott, it is well-positioned for sustainable growth for years to come based on the company’s rollout of the full suite of Alinity systems across additional geographies including the United States.
Additionally, management estimates Rapid Diagnostics to contribute more than $2 billion in 2018. The Zacks Consensus Estimate for Core Laboratory Diagnostic revenues of $1.83 billion depicts a 42.7% improvement from the registered figure in the comparable quarter last year.
We encouragingly note that Nutrition is Abbott’s 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, Abbott’s pediatric nutrition business continues to be robust in the United States. Thus, the Zacks Consensus Estimate of $1.82 billion for Nutrition revenues translates into a 2.9% rise from the year-ago quarter’s figure.
Overall, third-quarter total revenues are projected at $7.67 billion, up 12.3% from the prior-year period’s tally.
What the Model Suggests
Per the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has good chances of beating estimates if it also has a positive Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Abbott has a Zacks Rank #3, which increases the predictive power of ESP and an Earnings ESP of +0.49%. This combination suggests that the company is likely to beat on earnings this reporting season. The Zacks Consensus Estimate for bottom line of 74 cents reflects 12.1% growth year over year.
Other Stocks Worth a Look
Here are a few other medical stocks worth considering from the same space as these too comprise the right combination of elements to beat on earnings this time around.
Henry Schein, Inc. (HSIC - Free Report) has an Earnings ESP of +0.33% and is a Zacks #2 Ranked player. You can see the complete list of today's Zacks #1 Rank stocks here.
DaVita Inc. (DVA - Free Report) has an Earnings ESP of +2.41% and a Zacks Rank #2.
Masimo Corporation (MASI - Free Report) has an Earnings ESP of +0.98% and a Zacks Rank of 2.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>