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What's in Store for Abbott Laboratories (ABT) in Q4 Earnings?
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Abbott Laboratories (ABT - Free Report) is slated to report fourth-quarter 2022 results on Jan 25, before market open.
In the last reported quarter, the company delivered an earnings surprise of 26.37%. Over the trailing four quarters, its earnings exceeded the Zacks Consensus Estimate on all the occasions, the average beat being 21.78%.
Let's see how things have shaped up prior to this announcement.
Factors at Play
Stubborn inflationary pressure, record strengthening of the U.S. dollar and supply chain issues in certain areas of business, most notably, in Electrophysiology are expected to have adversely impacted Abbott’s overall fourth-quarter performance. Going by the industry-wide trend so far, logistical challenges and increasing unit cost might have weighed on corporate profitability of the company. Not just this, the existing healthcare staffing challenges and diminishing demand for COVID-testing products may also have weighed on the company through the Q4 months. The lockdown issues in limited geographies, including China where the company has extensive base, are expected to have also impacted business during the fourth quarter.
On a positive note, within Established Pharmaceuticals Division (EPD), the company has been witnessing visible signs of a rebound, reflecting sequential improvement based on its stable business model. New product launches across key markets have been majorly boosting the EPD business in recent months. The fourth-quarter performance is likely to have been driven by growing customer demand for core therapeutic lines, including cardiometabolic, respiratory and central nervous system/pain management.
In Diagnostics, we expect the company to report a year-over-year decline in COVID test sales due to lower demand for laboratory-based tests. However, the company might have registered growth in rapid tests, which include BinaxNOW, Panbio and ID NOW, in Q4. According to the company, with the emergence of new viruses that escape immunity, rapid tests have become the best tool to help slow and prevent transmission.
Excluding COVID testing revenues, sales of routine diagnostic tests are expected to have improved in Q4 on the continuous rollout of Alinity, Abbott’s suite of diagnostic instruments, as well as expanding menus across the company’s testing platforms of immunoassay, clinical chemistry and molecular testing.
Abbott’s other consumer-facing businesses, which include diabetes care, have been catching up, backed by new product instructions. In the United States, the company initiated the full launch of Libre 3, which automatically delivers minute glucose readings with accuracy, courtesy of the world’s smallest and thinnest wearable sensor. This is likely to have majorly contributed to the company's fourth-quarter performance. In this regard, we note that Abbott has been in the limelight for developments in its flagship, sensor-based continuous glucose monitoring system, widely known as the FreeStyle Libre System.
However, internationally, sales growth is expected to have been impacted by a couple of transitory items, including supply constraints on Libre 1 in certain emerging markets. Further, a strategic choice that the company made in Germany to rapidly transition its large existing user base to the latest generation Libre 3 system might have temporarily reduced Abbott’s focus on new user additions during the fourth quarter in this region.
Within Nutrition, total worldwide Nutrition and Pediatric Nutrition sales are expected to have declined in Q4, thanks to the voluntary recall and manufacturing shutdown of certain infant formula products being manufactured at one of Abbott's U.S. plants since last February. These include the company’s market-leading Similac and Elecare.
Though the company announced an update on the resumption of production at the Sturgis, MI facility, starting with the specialty formula EleCare and metabolic formulas, business recovery might take some more time. Per the last update, the company, in September, began production of several Similac products. Although Similac sales are expected to have been similar in the fourth-quarter months, a full-fledged business rebound might take longer.
Estimates
For fourth-quarter 2022, the Zacks Consensus Estimate for total revenues of $9.48 billion indicates a 17.4% decline from the prior-year comparable quarter’s reported figure. The consensus mark for earnings is pegged at 90 cents, suggesting a 31.8% decline year on year.
Earnings Whispers
Per our proven model, a stock with the combination of a positive Earnings ESPand a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a higher chance of beating estimates. However, that is not the case here as you can see:
Earnings ESP: Abbott has an Earnings ESP of -0.19%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: It currently carries a Zacks Rank #3.
Stocks Worth a Look
Here are some medical stocks worth considering as these have the right combination of elements to post an earnings beat this quarter.
Cardinal Health has a long-term expected earnings growth rate of 11.7%. Cardinal Health’s earnings yield of 6.87% compares favorably with the industry’s 4.34%.
Hologic (HOLX - Free Report) has an Earnings ESP of +3.13% and a Zacks Rank of #2. Hologic is scheduled to release first-quarter fiscal 2023 results on Feb 1.
Hologic’s long-term historical earnings growth rate is estimated at 23.4%. Hologic’s earnings yield of 4.35% compares favorably with the industry’s -6.74%.
Laboratory Corporation of America Holdings or LabCorp (LH - Free Report) currently has an Earnings ESP of +2.67% and a Zacks Rank of #2. LabCorp is expected to release fourth-quarter 2022 results soon.
LabCorp’s long-term historical earnings growth rate is estimated at 26.1%. LabCorp’s earnings yield of 7.02% compares favorably with the industry’s 4.34%.
Image: Bigstock
What's in Store for Abbott Laboratories (ABT) in Q4 Earnings?
Abbott Laboratories (ABT - Free Report) is slated to report fourth-quarter 2022 results on Jan 25, before market open.
In the last reported quarter, the company delivered an earnings surprise of 26.37%. Over the trailing four quarters, its earnings exceeded the Zacks Consensus Estimate on all the occasions, the average beat being 21.78%.
Let's see how things have shaped up prior to this announcement.
Factors at Play
Stubborn inflationary pressure, record strengthening of the U.S. dollar and supply chain issues in certain areas of business, most notably, in Electrophysiology are expected to have adversely impacted Abbott’s overall fourth-quarter performance. Going by the industry-wide trend so far, logistical challenges and increasing unit cost might have weighed on corporate profitability of the company. Not just this, the existing healthcare staffing challenges and diminishing demand for COVID-testing products may also have weighed on the company through the Q4 months. The lockdown issues in limited geographies, including China where the company has extensive base, are expected to have also impacted business during the fourth quarter.
On a positive note, within Established Pharmaceuticals Division (EPD), the company has been witnessing visible signs of a rebound, reflecting sequential improvement based on its stable business model. New product launches across key markets have been majorly boosting the EPD business in recent months. The fourth-quarter performance is likely to have been driven by growing customer demand for core therapeutic lines, including cardiometabolic, respiratory and central nervous system/pain management.
Abbott Laboratories Price and EPS Surprise
Abbott Laboratories price-eps-surprise | Abbott Laboratories Quote
In Diagnostics, we expect the company to report a year-over-year decline in COVID test sales due to lower demand for laboratory-based tests. However, the company might have registered growth in rapid tests, which include BinaxNOW, Panbio and ID NOW, in Q4. According to the company, with the emergence of new viruses that escape immunity, rapid tests have become the best tool to help slow and prevent transmission.
Excluding COVID testing revenues, sales of routine diagnostic tests are expected to have improved in Q4 on the continuous rollout of Alinity, Abbott’s suite of diagnostic instruments, as well as expanding menus across the company’s testing platforms of immunoassay, clinical chemistry and molecular testing.
Abbott’s other consumer-facing businesses, which include diabetes care, have been catching up, backed by new product instructions. In the United States, the company initiated the full launch of Libre 3, which automatically delivers minute glucose readings with accuracy, courtesy of the world’s smallest and thinnest wearable sensor. This is likely to have majorly contributed to the company's fourth-quarter performance. In this regard, we note that Abbott has been in the limelight for developments in its flagship, sensor-based continuous glucose monitoring system, widely known as the FreeStyle Libre System.
However, internationally, sales growth is expected to have been impacted by a couple of transitory items, including supply constraints on Libre 1 in certain emerging markets. Further, a strategic choice that the company made in Germany to rapidly transition its large existing user base to the latest generation Libre 3 system might have temporarily reduced Abbott’s focus on new user additions during the fourth quarter in this region.
Within Nutrition, total worldwide Nutrition and Pediatric Nutrition sales are expected to have declined in Q4, thanks to the voluntary recall and manufacturing shutdown of certain infant formula products being manufactured at one of Abbott's U.S. plants since last February. These include the company’s market-leading Similac and Elecare.
Though the company announced an update on the resumption of production at the Sturgis, MI facility, starting with the specialty formula EleCare and metabolic formulas, business recovery might take some more time. Per the last update, the company, in September, began production of several Similac products. Although Similac sales are expected to have been similar in the fourth-quarter months, a full-fledged business rebound might take longer.
Estimates
For fourth-quarter 2022, the Zacks Consensus Estimate for total revenues of $9.48 billion indicates a 17.4% decline from the prior-year comparable quarter’s reported figure. The consensus mark for earnings is pegged at 90 cents, suggesting a 31.8% decline year on year.
Earnings Whispers
Per our proven model, a stock with the combination of a positive Earnings ESPand a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a higher chance of beating estimates. However, that is not the case here as you can see:
Earnings ESP: Abbott has an Earnings ESP of -0.19%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: It currently carries a Zacks Rank #3.
Stocks Worth a Look
Here are some medical stocks worth considering as these have the right combination of elements to post an earnings beat this quarter.
Cardinal Health (CAH - Free Report) has an Earnings ESP of +5.75% and a Zacks Rank of #2. The company will release fourth-quarter 2022 results on Feb 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Cardinal Health has a long-term expected earnings growth rate of 11.7%. Cardinal Health’s earnings yield of 6.87% compares favorably with the industry’s 4.34%.
Hologic (HOLX - Free Report) has an Earnings ESP of +3.13% and a Zacks Rank of #2. Hologic is scheduled to release first-quarter fiscal 2023 results on Feb 1.
Hologic’s long-term historical earnings growth rate is estimated at 23.4%. Hologic’s earnings yield of 4.35% compares favorably with the industry’s -6.74%.
Laboratory Corporation of America Holdings or LabCorp (LH - Free Report) currently has an Earnings ESP of +2.67% and a Zacks Rank of #2. LabCorp is expected to release fourth-quarter 2022 results soon.
LabCorp’s long-term historical earnings growth rate is estimated at 26.1%. LabCorp’s earnings yield of 7.02% compares favorably with the industry’s 4.34%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.