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What's in Store for Abbott Laboratories (ABT) in Q2 Earnings?
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Abbott Laboratories (ABT - Free Report) is slated to report second-quarter 2023 results on July 20 before market open.
In the last reported quarter, the company delivered an earnings surprise of 5.1%. In the trailing four quarters, its earnings exceeded the Zacks Consensus Estimate on all the occasions, the average beat being 19.28%.
Let's see how things have shaped up prior to this announcement.
Factors at Play
Within Established Pharmaceuticals Division (EPD), the company has been witnessing solid growth banking on the successful execution of its Branded Generic operating model. The second-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. Our model projects the EPD business to report $1.82 billion revenues for the second quarter, suggesting a 3.4% decline year over year.
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. Excluding COVID testing revenues, sales of routine diagnostic tests are expected to have improved on the continuous rollout of Alinity — Abbott’s suite of diagnostic instruments — and expanding menus across testing platforms of immunoassay, clinical chemistry and molecular testing. In April 2023, Abbott partnered with the Climate Amplified Disease and Epidemics consortium — a group of more than 100 global scientists in public health agencies, academia and industry focused on using data science technology and diagnostic testing to assess and potentially mitigate the impact climate change has on disease outbreaks. We believe this development to have contributed to the company’s second-quarter performance. Our model projects the Diagnostics business to report $3.18 billion revenues in Q2, indicating a 26.4% fall year over year.
Abbott’s another consumer-facing business Diabetes Care, has been catching up, backed by new product instructions. The full launch of Libre 3 in the United States, which automatically delivers minute glucose readings with accuracy, courtesy of the world’s smallest and thinnest wearable sensor is likely to have contributed to second-quarter performance on strong consumer adoption. In April 2023, Abbott’s FreeStyle Libre 3 reader, featuring the world's smallest, thinnest and most discreet glucose sensor, received FDA clearance. In the same month, the Medicare program has expanded access to continuous glucose monitoring systems like the FreeStyle Libre 2 system and the FreeStyle Libre 14-day system for insulin-using1 Medicare beneficiaries with diabetes, removing the prior requirement of multiple daily insulin injections. These developments are likely to have contributed to company’s top line during the reported quarter backed by strong market adoption. Our model expects the Diabetes business to report $1.03 billion revenues in Q2, calling for a 14% decline year over year.
Within Structural Heart, the recent FDA approval for company's TactiFlex Ablation Catheter, Sensor Enabled — the world's first ablation catheter with a flexible tip and contact force technology and Assert-IQ insertable cardiac monitor (ICM) to help doctors monitor people's heart rhythms are expected have contributed to the second-quarter performance on the back on strong market adoption. Our model project EPD business to report $420 million revenues in Q2, indicating a 4.5% decline year over year.
Within Nutrition, total worldwide Nutrition and Pediatric Nutrition sales are expected to have declined in the quarter to be reported, thanks to the voluntary recall and manufacturing shutdown of certain infant formula products manufactured at one of Abbott's U.S. plants since last February. These include the company’s market-leading Similac and Elecare. However, the segment is likely to have benefitted from strong performance of its market leading Ensure brand. Our model expects Nutrition business to report $1.75 billion revenues in the quarter to be reported, suggesting a 10.6% decline year over year.
In April 2023, Abbott acquired Cardiovascular Systems — a medical device company with an innovative atherectomy system used in treating peripheral and coronary artery disease. The addition of CSI to ABT's vascular portfolio is a part of a larger investment that will improve the company's capacity to treat patients with peripheral and coronary artery disease. We believe this strategic move to have contributed positively to the company’s top line during the second quarter.
However, Persistent healthcare staffing challenges and diminishing demand for COVID-testing products are expected to have dented Abbott’s overall second-quarter performance. The decline in U.S. infant formula sales due to manufacturing disruptions and stubborn inflationary pressure, record strengthening of the U.S. dollar and supply chain issues in certain areas of business are expected to have weighed heavily on the company through the second quarter.
Estimates
For second-quarter 2023, the Zacks Consensus Estimate for total revenues is pegged at $9.67 billion, indicating a 14.1% decline from the prior-year comparable quarter’s reported figure. The consensus mark for earnings is pegged at $1,04 per share, suggesting a 27.3% decline year on year.
Earnings Whispers
Our proven model predicts an earnings beat for Abbott this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.
Earnings ESP: Abbott has an Earnings ESP of +0.86%. 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 #2.
Other Stocks Worth Considering
Here are some medical stocks worth considering as these have the right combination of elements to post an earnings beat this quarter.
HealthEquity has a 2024 expected earnings growth rate of 22%. HQY’s earnings yield of 2.76% compares favorably with the industry’s (4.23%).
Exact Sciences Corporation (EXAS - Free Report) has an Earnings ESP of +2.26% and a Zacks Rank of #2. Exact Sciences is expected to release second-quarter fiscal 2023 results on Aug 1.
Exact Sciences’ Price/Sales ratio of 7.8% compares favorably with the industry’s 7.4%. EXAS has projected sale growth of 15.8% compared with the industry’s 0.9%.
Neogen Corporation (NEOG - Free Report) currently has an Earnings ESP of +33.33% and a Zacks Rank of #1. NEOG is expected to release third-quarter 2023 results on July 25.
NEOG’s earnings yield of 1.44% compares favorably with the industry’s (3.1%). NEOG’s current ratio of 5.2% compares favorably with the industry’s 2.2%.
Image: Bigstock
What's in Store for Abbott Laboratories (ABT) in Q2 Earnings?
Abbott Laboratories (ABT - Free Report) is slated to report second-quarter 2023 results on July 20 before market open.
In the last reported quarter, the company delivered an earnings surprise of 5.1%. In the trailing four quarters, its earnings exceeded the Zacks Consensus Estimate on all the occasions, the average beat being 19.28%.
Let's see how things have shaped up prior to this announcement.
Factors at Play
Within Established Pharmaceuticals Division (EPD), the company has been witnessing solid growth banking on the successful execution of its Branded Generic operating model. The second-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. Our model projects the EPD business to report $1.82 billion revenues for the second quarter, suggesting a 3.4% decline year over year.
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. Excluding COVID testing revenues, sales of routine diagnostic tests are expected to have improved on the continuous rollout of Alinity — Abbott’s suite of diagnostic instruments — and expanding menus across testing platforms of immunoassay, clinical chemistry and molecular testing. In April 2023, Abbott partnered with the Climate Amplified Disease and Epidemics consortium — a group of more than 100 global scientists in public health agencies, academia and industry focused on using data science technology and diagnostic testing to assess and potentially mitigate the impact climate change has on disease outbreaks. We believe this development to have contributed to the company’s second-quarter performance. Our model projects the Diagnostics business to report $3.18 billion revenues in Q2, indicating a 26.4% fall year over year.
Abbott’s another consumer-facing business Diabetes Care, has been catching up, backed by new product instructions. The full launch of Libre 3 in the United States, which automatically delivers minute glucose readings with accuracy, courtesy of the world’s smallest and thinnest wearable sensor is likely to have contributed to second-quarter performance on strong consumer adoption. In April 2023, Abbott’s FreeStyle Libre 3 reader, featuring the world's smallest, thinnest and most discreet glucose sensor, received FDA clearance. In the same month, the Medicare program has expanded access to continuous glucose monitoring systems like the FreeStyle Libre 2 system and the FreeStyle Libre 14-day system for insulin-using1 Medicare beneficiaries with diabetes, removing the prior requirement of multiple daily insulin injections. These developments are likely to have contributed to company’s top line during the reported quarter backed by strong market adoption. Our model expects the Diabetes business to report $1.03 billion revenues in Q2, calling for a 14% decline year over year.
Within Structural Heart, the recent FDA approval for company's TactiFlex Ablation Catheter, Sensor Enabled — the world's first ablation catheter with a flexible tip and contact force technology and Assert-IQ insertable cardiac monitor (ICM) to help doctors monitor people's heart rhythms are expected have contributed to the second-quarter performance on the back on strong market adoption. Our model project EPD business to report $420 million revenues in Q2, indicating a 4.5% decline year over year.
Within Nutrition, total worldwide Nutrition and Pediatric Nutrition sales are expected to have declined in the quarter to be reported, thanks to the voluntary recall and manufacturing shutdown of certain infant formula products manufactured at one of Abbott's U.S. plants since last February. These include the company’s market-leading Similac and Elecare. However, the segment is likely to have benefitted from strong performance of its market leading Ensure brand. Our model expects Nutrition business to report $1.75 billion revenues in the quarter to be reported, suggesting a 10.6% decline year over year.
Abbott Laboratories Price and EPS Surprise
Abbott Laboratories price-eps-surprise | Abbott Laboratories Quote
In April 2023, Abbott acquired Cardiovascular Systems — a medical device company with an innovative atherectomy system used in treating peripheral and coronary artery disease. The addition of CSI to ABT's vascular portfolio is a part of a larger investment that will improve the company's capacity to treat patients with peripheral and coronary artery disease. We believe this strategic move to have contributed positively to the company’s top line during the second quarter.
However, Persistent healthcare staffing challenges and diminishing demand for COVID-testing products are expected to have dented Abbott’s overall second-quarter performance. The decline in U.S. infant formula sales due to manufacturing disruptions and stubborn inflationary pressure, record strengthening of the U.S. dollar and supply chain issues in certain areas of business are expected to have weighed heavily on the company through the second quarter.
Estimates
For second-quarter 2023, the Zacks Consensus Estimate for total revenues is pegged at $9.67 billion, indicating a 14.1% decline from the prior-year comparable quarter’s reported figure. The consensus mark for earnings is pegged at $1,04 per share, suggesting a 27.3% decline year on year.
Earnings Whispers
Our proven model predicts an earnings beat for Abbott this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.
Earnings ESP: Abbott has an Earnings ESP of +0.86%. 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 #2.
Other Stocks Worth Considering
Here are some medical stocks worth considering as these have the right combination of elements to post an earnings beat this quarter.
HealthEquity (HQY - Free Report) has an Earnings ESP of +0.98% and a Zacks Rank of #1. The company will release third-quarter 2023 results on Sep 5. You can see the complete list of today’s Zacks #1 Rank stocks here.
HealthEquity has a 2024 expected earnings growth rate of 22%. HQY’s earnings yield of 2.76% compares favorably with the industry’s (4.23%).
Exact Sciences Corporation (EXAS - Free Report) has an Earnings ESP of +2.26% and a Zacks Rank of #2. Exact Sciences is expected to release second-quarter fiscal 2023 results on Aug 1.
Exact Sciences’ Price/Sales ratio of 7.8% compares favorably with the industry’s 7.4%. EXAS has projected sale growth of 15.8% compared with the industry’s 0.9%.
Neogen Corporation (NEOG - Free Report) currently has an Earnings ESP of +33.33% and a Zacks Rank of #1. NEOG is expected to release third-quarter 2023 results on July 25.
NEOG’s earnings yield of 1.44% compares favorably with the industry’s (3.1%). NEOG’s current ratio of 5.2% compares favorably with the industry’s 2.2%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.