Abbott Laboratories (ABT - Free Report) reported second-quarter 2016 earnings of 55 cents per share, higher than both the Zacks Consensus Estimate of 53 cents and the year-ago figure of 52 cents.
In the reported quarter, sales came in at $5.3 billion, up 3.2% year over year on a reported basis, and surpassed the Zacks Consensus Estimate of $5.26 billion. However, the top line was impacted by unfavorable foreign exchange movement of 3.2% during the quarter.
Quarter in Detail
Abbott Labs operates through four segments – Established Pharmaceuticals Division (EPD), Medical Devices, Nutrition and Diagnostics.
EPD sales were down 0.4% to $980 million, including a negative impact of 9.1% due to currency fluctuations. Sales in key emerging markets soared 15.9% on an operational basis driven by solid growth in India.
The Medical Devices business generated sales of $1.4 billion, up 6.4% year over year. Vascular product sales were up 8.3% on the back of double-digit growth of MitraClip. The FDA recently approved the company’s bioresorbable stent, Absorb. Diabetes Care sales increased 1.7% driven by continued consumer uptake of FreeStyle Libre.
However, sales were impacted by competitive and market dynamics in the U.S. Sales of Medical Optics were up 6.2% backed by continued market uptake of cataract products in the premium intraocular lens segment. Abbott recently received FDA approval for its Tecnis Symfony intraocular lenses as well.
Nutrition sales were up 1.4% year over year to $1.7 billion. Pediatric Nutrition sales grew 3.4% on an operational basis. Growth was driven above-market growth in the U.S. as well as continued uptake of recently launched products including infant and toddler non-GMO products and growth in Latin America and Asia. Adult Nutrition sales improved 5.5% on an operational basis led by a strong performance of Ensure and growth in international markets.
Diagnostics sales increased 4.1% year over year to $1.2 billion. Core Laboratory sales and Point-of-Care Diagnostics sales were up 3.4% and 11.5%, respectively. Molecular Diagnostics sales grew 2.5% as growth in the infectious disease testing business was partially offset by the planned scale-down of the genetics business.
2016 Outlook
Abbott Labs reiterated its earnings per share guidance in the range of $2.14 to $2.24. The current Zacks Consensus Estimate stands at $2.20.
Our Take
Abbott Labs’ second-quarter results were much better than expected due to the recent product launches – Eleva in China, MitraClip, Freestyle Libre in Europe and Supera peripheral stent. Going ahead, the recent FDA approval of Absorb, the only fully dissolving heart stent, and Tecnis Symfony intraocular lenses for the treatment of cataracts will fuel its performance. The company also stands to benefit from its upcoming acquisition of St. Jude Medical , which will offer it an industry leading pipeline across cardiovascular, neuromodulation, diabetes and vision care.
Abbott Labs currently has a Zacks Rank #3 (Hold). Investors interested in the health care sector may consider Johnson & Johnson (JNJ - Free Report) and Gilead Sciences (GILD - Free Report) . Both the stocks carry a Zacks Rank #2 (Buy).
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Abbott Laboratories (ABT - Free Report) reported second-quarter 2016 earnings of 55 cents per share, higher than both the Zacks Consensus Estimate of 53 cents and the year-ago figure of 52 cents.
In the reported quarter, sales came in at $5.3 billion, up 3.2% year over year on a reported basis, and surpassed the Zacks Consensus Estimate of $5.26 billion. However, the top line was impacted by unfavorable foreign exchange movement of 3.2% during the quarter.
Quarter in Detail
Abbott Labs operates through four segments – Established Pharmaceuticals Division (EPD), Medical Devices, Nutrition and Diagnostics.
EPD sales were down 0.4% to $980 million, including a negative impact of 9.1% due to currency fluctuations. Sales in key emerging markets soared 15.9% on an operational basis driven by solid growth in India.
The Medical Devices business generated sales of $1.4 billion, up 6.4% year over year. Vascular product sales were up 8.3% on the back of double-digit growth of MitraClip. The FDA recently approved the company’s bioresorbable stent, Absorb. Diabetes Care sales increased 1.7% driven by continued consumer uptake of FreeStyle Libre.
However, sales were impacted by competitive and market dynamics in the U.S. Sales of Medical Optics were up 6.2% backed by continued market uptake of cataract products in the premium intraocular lens segment. Abbott recently received FDA approval for its Tecnis Symfony intraocular lenses as well.
Nutrition sales were up 1.4% year over year to $1.7 billion. Pediatric Nutrition sales grew 3.4% on an operational basis. Growth was driven above-market growth in the U.S. as well as continued uptake of recently launched products including infant and toddler non-GMO products and growth in Latin America and Asia. Adult Nutrition sales improved 5.5% on an operational basis led by a strong performance of Ensure and growth in international markets.
Diagnostics sales increased 4.1% year over year to $1.2 billion. Core Laboratory sales and Point-of-Care Diagnostics sales were up 3.4% and 11.5%, respectively. Molecular Diagnostics sales grew 2.5% as growth in the infectious disease testing business was partially offset by the planned scale-down of the genetics business.
2016 Outlook
Abbott Labs reiterated its earnings per share guidance in the range of $2.14 to $2.24. The current Zacks Consensus Estimate stands at $2.20.
Our Take
Abbott Labs’ second-quarter results were much better than expected due to the recent product launches – Eleva in China, MitraClip, Freestyle Libre in Europe and Supera peripheral stent. Going ahead, the recent FDA approval of Absorb, the only fully dissolving heart stent, and Tecnis Symfony intraocular lenses for the treatment of cataracts will fuel its performance. The company also stands to benefit from its upcoming acquisition of St. Jude Medical , which will offer it an industry leading pipeline across cardiovascular, neuromodulation, diabetes and vision care.
Abbott Labs currently has a Zacks Rank #3 (Hold). Investors interested in the health care sector may consider Johnson & Johnson (JNJ - Free Report) and Gilead Sciences (GILD - Free Report) . Both the stocks carry a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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