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Abbott (ABT) Benefits From Innovation Amid FX Headwinds
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Abbott’s (ABT - Free Report) new product launches and geographic expansion should boost sales. Low diagnostic testing demand continues to dent sales. The stock carries a Zacks Rank #3 (Hold).
Abbott is expanding its Diagnostics business (consisting of 24% of the company’s total revenues in the third quarter of 2023). Although, over the past few quarters, there has been a significant decline in demand for Abbott’s rapid diagnostic tests to detect COVID-19 as compared to the year-ago period, it is largely being offset by higher growth across other businesses.
Within Established Pharmaceuticals Division (EPD), in September, Abbott entered into an agreement with global biotech leader mAbxience to commercialize several biosimilars in emerging markets. This collaboration will help introduce cutting-edge medicines in the areas of oncology, women's health and respiratory diseases to people in countries that have historically lacked access to these treatment options.
Abbott’s EPD sales in the third quarter increased 11.1% year over organically. In key emerging markets, organic sales improved 8.8% year over year, led by growth in several geographies and therapeutic areas, including gastroenterology, women's health and central nervous system/pain management.
Further, following a slew of developments, the Diabetes Care business achieved organic sales growth of 24.5% in the third quarter of 2023. This was led by FreeStyle Libre, which contributed $1.4 billion in revenues in the reported quarter. At the end of the third quarter, the global Libre user base exceeded 5 million people, with nearly 2 million in the United States, where the Libre user base has nearly doubled in the last two years.
Over the past year, shares of Abbott have lost 2.8% compared with the industry’s 5.4% fall.
On the flip side, Abbott has been experiencing a continuous decline in COVID testing-related demand. In the third quarter of 2023, Abbott’s Rapid Diagnostics sales decreased 59.2% from the year-ago period due to lower demand for COVID-19 tests.
Further, foreign exchange is a major headwind for Abbott as a considerable percentage of its revenues comes from outside the United States. The strengthening of the euro and some other developed market currencies has constantly been hampering the company’s performance in the international markets. In the third quarter, foreign exchange had an unfavorable year-over-year impact of 1.4% on sales.
Estimates for Insulet’s 2023 earnings per share have increased from $1.61 to $1.90 in the past 30 days. Shares of the company have decreased 40.1% in the past year compared with the industry’s decline of 6.3%.
PODD’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 105.1%. In the last reported quarter, it delivered an average earnings surprise of 77.4%.
Haemonetics’ stock has risen 2.8% in the past year. Earnings estimates for Haemonetics have increased from $3.82 to $3.86 in 2023 and from $4.07 to $4.11 in 2024 in the past 30 days.
HAE’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 16.1%. In the last reported quarter, it posted an earnings surprise of 5.3%.
Estimates for DexCom’s 2023 earnings per share have increased from $1.23 to $1.43 in the past 30 days. Shares of the company have fallen 6.8% in the past year compared with the industry’s decline of 6.6%.
DXCM’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 36.4%. In the last reported quarter, it delivered an average earnings surprise of 47.1%.
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Abbott (ABT) Benefits From Innovation Amid FX Headwinds
Abbott’s (ABT - Free Report) new product launches and geographic expansion should boost sales. Low diagnostic testing demand continues to dent sales. The stock carries a Zacks Rank #3 (Hold).
Abbott is expanding its Diagnostics business (consisting of 24% of the company’s total revenues in the third quarter of 2023). Although, over the past few quarters, there has been a significant decline in demand for Abbott’s rapid diagnostic tests to detect COVID-19 as compared to the year-ago period, it is largely being offset by higher growth across other businesses.
Within Established Pharmaceuticals Division (EPD), in September, Abbott entered into an agreement with global biotech leader mAbxience to commercialize several biosimilars in emerging markets. This collaboration will help introduce cutting-edge medicines in the areas of oncology, women's health and respiratory diseases to people in countries that have historically lacked access to these treatment options.
Abbott’s EPD sales in the third quarter increased 11.1% year over organically. In key emerging markets, organic sales improved 8.8% year over year, led by growth in several geographies and therapeutic areas, including gastroenterology, women's health and central nervous system/pain management.
Abbott Laboratories Price
Abbott Laboratories price | Abbott Laboratories Quote
Further, following a slew of developments, the Diabetes Care business achieved organic sales growth of 24.5% in the third quarter of 2023. This was led by FreeStyle Libre, which contributed $1.4 billion in revenues in the reported quarter. At the end of the third quarter, the global Libre user base exceeded 5 million people, with nearly 2 million in the United States, where the Libre user base has nearly doubled in the last two years.
Over the past year, shares of Abbott have lost 2.8% compared with the industry’s 5.4% fall.
On the flip side, Abbott has been experiencing a continuous decline in COVID testing-related demand. In the third quarter of 2023, Abbott’s Rapid Diagnostics sales decreased 59.2% from the year-ago period due to lower demand for COVID-19 tests.
Further, foreign exchange is a major headwind for Abbott as a considerable percentage of its revenues comes from outside the United States. The strengthening of the euro and some other developed market currencies has constantly been hampering the company’s performance in the international markets. In the third quarter, foreign exchange had an unfavorable year-over-year impact of 1.4% on sales.
Key Picks
Some better-ranked stocks in the broader medical space are Insulet (PODD - Free Report) , Haemonetics (HAE - Free Report) and DexCom (DXCM - Free Report) . While Insulet presently sports a Zacks Rank #1 (Strong Buy), Haemonetics and DexCom carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Estimates for Insulet’s 2023 earnings per share have increased from $1.61 to $1.90 in the past 30 days. Shares of the company have decreased 40.1% in the past year compared with the industry’s decline of 6.3%.
PODD’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 105.1%. In the last reported quarter, it delivered an average earnings surprise of 77.4%.
Haemonetics’ stock has risen 2.8% in the past year. Earnings estimates for Haemonetics have increased from $3.82 to $3.86 in 2023 and from $4.07 to $4.11 in 2024 in the past 30 days.
HAE’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 16.1%. In the last reported quarter, it posted an earnings surprise of 5.3%.
Estimates for DexCom’s 2023 earnings per share have increased from $1.23 to $1.43 in the past 30 days. Shares of the company have fallen 6.8% in the past year compared with the industry’s decline of 6.6%.
DXCM’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 36.4%. In the last reported quarter, it delivered an average earnings surprise of 47.1%.