We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Abbott's (ABT) Q4 Earnings Match Estimates, Margins Rise
Read MoreHide Full Article
Abbott Laboratories (ABT - Free Report) reported fourth-quarter 2023 adjusted earnings per share (EPS) of $1.19, in line with the Zacks Consensus Estimate. The adjusted figure increased 15.5% from the prior-year quarter’s level. The quarter’s adjustments include 28 cents of certain non-recurring items.
GAAP EPS came in at 91 cents, which increased 54.2% year over year.
Full-year adjusted EPS was $4.44, reflecting a 16.9% decline from the 2022 figure. The figure, too, however, came in line with the Zacks Consensus Estimate.
Fourth-quarter worldwide sales of $10.24 billion were up 1.5% year over year on a reported basis. The top line exceeded the Zacks Consensus Estimate by 0.7%.
Organically, sales improved 2.1% year over year. On an organic basis (excluding the impact of COVID-19 testing sales), sales rose 11% year over year in the reported quarter.
Full-year worldwide sales were $40.11 billion, an 8.1% decline from the 2022 level. This, however, exceeded the Zacks Consensus Estimate by 0.2%
Q4 Results in Detail
Abbott operates through four segments — Established Pharmaceuticals, Medical Devices, Nutrition and Diagnostics.
In the fourth quarter, Established Pharmaceuticals’ product sales increased 0.5% on a reported basis (up 8.8% on an organic basis) to $1.22 billion.
Organic sales in key emerging markets improved 11.4% year over year. This was led by growth in several geographies and therapeutic areas, including cardiometabolic, gastroenterology, respiratory and central nervous system/pain management.
Abbott Laboratories Price, Consensus and EPS Surprise
The Medical Devices segment’s sales rose 17.5% year over year on a reported basis (up 15.4% on an organic basis) to $4.44 billion.
Sales growth was led by double-digit organic growth in Diabetes Care, Neuromodulation, Structural Heart, Electrophysiology, Heart Failure and Rhythm Management. Several recently launched products and new indications contributed to the strong performance, including Amplatzer Amulet, Navitor, TriClip and AVEIR.
The Diabetes Care division reported organic sales growth of 20.7% year over year, led by FreeStyle Libre, which contributed $1.4 billion to revenues in the reported quarter. Structural Heart sales rose 11.4%. Heart Failure sales improved 15.4% year over year organically.
The Vascular division recorded organic sales growth of 4.5% in the quarter under review. The Electrophysiology, Rhythm Management and Neuromodulation divisions recorded organic growth of 21.2%, 12.1% and 18.8%, respectively, in the quarter under review.
Nutrition sales rose 12.2% year over year on a reported basis (up 13.9% on an organic basis) to $2.04 billion.
Pediatric Nutrition sales registered 14.5% growth on an organic basis. Adult Nutrition sales improved 13.4% organically. Per the company, Adult Nutrition sales benefited from the strong global sales performance of Abbott's market-leading complete and balanced nutrition brand, Ensure.
Diagnostics sales were down 22.7% year over year on a reported basis (down 22.3% on an organic basis) to $2.53 billion.
Core Laboratory Diagnostics sales were up 9.1% organically. Molecular Diagnostics declined 14.9% on an organic basis. Rapid Diagnostics sales plunged 49.2% on an organic basis, whereas Point of Care Diagnostics sales rose 13% organically.
Margins
In the fourth quarter, gross profit rose 3.4% year over year to $5.69 billion. The gross margin expanded 103 basis points (bps) to 55.5%.
SG&A expenses were down 8.4% year over year to $2.72 billion. R&D expenses decreased 3.4% year over year to $700 million. The company reported an adjusted operating profit of $2.26 billion in the quarter under review, up 25.6% year over year. Also, the adjusted operating margin expanded 424 bps to 22.1%.
2024 Guidance
Full-year adjusted earnings (excluding specified items of $1.30 per share) are expected in the range of $4.50-$4.70 per share. The Zacks Consensus Estimate is pegged at $4.62.
Abbott projects full-year 2024 organic sales growth, excluding COVID-19 testing-related sales, in the range of 8.0% to 10.0%. The Zacks Consensus Estimate for sales is currently pegged at $41.55 billion.
Our Take
Abbott delivered better-than-expected revenues and in-line earnings for the fourth quarter of 2023. The figures improved on a year-over-year basis.
On a positive note, broad-based growth witnessed in the underlying base business is highly appreciating. In 2023, Abbott continued to recapture market share in the U.S. infant formula market. The company has now reclaimed its previous market-leading position, as measured on a volume basis.
Meanwhile, declines in COVID-19 testing-related sales continue to affect Diagnostics sales growth, which adds to our concern.
The Zacks Consensus Estimate for SiBone’s fourth-quarter 2023 bottom line is pegged at a loss of 28 cents, implying a 12.9% improvement from the year-ago period. The consensus estimate for revenues is pegged at $38.6 million, suggesting 20.8% growth from the fourth quarter of 2022.
SiBone has an estimated long-term earnings growth rate of 14.9% compared with the industry’s 13.4% growth. SIBN’s earnings surpassed estimates in all the trailing four quarters, the average being 24.21%.
Estimates for Surgery Partners’ fourth-quarter 2023 EPS are pegged at 37 cents, implying a 37% improvement from the year-ago period. Revenues are projected to be $741.5 million, suggesting 4.9% growth from the fourth quarter of 2022.
Surgery Partners’ 2024 earnings growth rate is predicted to be 4.8%, while the revenue growth rate is estimated to be 9.2%. SGRY’s earnings surpassed estimates in all the trailing four quarters, the average being 316.07%.
Haemonetics is expected to report third-quarter fiscal 2024 EPS of 97 cents, implying a 14.1% improvement from the year-ago period. Projected revenues of $322.5 million suggest 5.6% growth from the fiscal third quarter of 2023.
Haemonetics has a historical long-term earnings growth rate of 9.4% compared with the industry’s 7.5% growth. HAE’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 16.08%.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Abbott's (ABT) Q4 Earnings Match Estimates, Margins Rise
Abbott Laboratories (ABT - Free Report) reported fourth-quarter 2023 adjusted earnings per share (EPS) of $1.19, in line with the Zacks Consensus Estimate. The adjusted figure increased 15.5% from the prior-year quarter’s level. The quarter’s adjustments include 28 cents of certain non-recurring items.
GAAP EPS came in at 91 cents, which increased 54.2% year over year.
Full-year adjusted EPS was $4.44, reflecting a 16.9% decline from the 2022 figure. The figure, too, however, came in line with the Zacks Consensus Estimate.
Fourth-quarter worldwide sales of $10.24 billion were up 1.5% year over year on a reported basis. The top line exceeded the Zacks Consensus Estimate by 0.7%.
Organically, sales improved 2.1% year over year. On an organic basis (excluding the impact of COVID-19 testing sales), sales rose 11% year over year in the reported quarter.
Full-year worldwide sales were $40.11 billion, an 8.1% decline from the 2022 level. This, however, exceeded the Zacks Consensus Estimate by 0.2%
Q4 Results in Detail
Abbott operates through four segments — Established Pharmaceuticals, Medical Devices, Nutrition and Diagnostics.
In the fourth quarter, Established Pharmaceuticals’ product sales increased 0.5% on a reported basis (up 8.8% on an organic basis) to $1.22 billion.
Organic sales in key emerging markets improved 11.4% year over year. This was led by growth in several geographies and therapeutic areas, including cardiometabolic, gastroenterology, respiratory and central nervous system/pain management.
Abbott Laboratories Price, Consensus and EPS Surprise
Abbott Laboratories price-consensus-eps-surprise-chart | Abbott Laboratories Quote
The Medical Devices segment’s sales rose 17.5% year over year on a reported basis (up 15.4% on an organic basis) to $4.44 billion.
Sales growth was led by double-digit organic growth in Diabetes Care, Neuromodulation, Structural Heart, Electrophysiology, Heart Failure and Rhythm Management. Several recently launched products and new indications contributed to the strong performance, including Amplatzer Amulet, Navitor, TriClip and AVEIR.
The Diabetes Care division reported organic sales growth of 20.7% year over year, led by FreeStyle Libre, which contributed $1.4 billion to revenues in the reported quarter. Structural Heart sales rose 11.4%. Heart Failure sales improved 15.4% year over year organically.
The Vascular division recorded organic sales growth of 4.5% in the quarter under review. The Electrophysiology, Rhythm Management and Neuromodulation divisions recorded organic growth of 21.2%, 12.1% and 18.8%, respectively, in the quarter under review.
Nutrition sales rose 12.2% year over year on a reported basis (up 13.9% on an organic basis) to $2.04 billion.
Pediatric Nutrition sales registered 14.5% growth on an organic basis. Adult Nutrition sales improved 13.4% organically. Per the company, Adult Nutrition sales benefited from the strong global sales performance of Abbott's market-leading complete and balanced nutrition brand, Ensure.
Diagnostics sales were down 22.7% year over year on a reported basis (down 22.3% on an organic basis) to $2.53 billion.
Core Laboratory Diagnostics sales were up 9.1% organically. Molecular Diagnostics declined 14.9% on an organic basis. Rapid Diagnostics sales plunged 49.2% on an organic basis, whereas Point of Care Diagnostics sales rose 13% organically.
Margins
In the fourth quarter, gross profit rose 3.4% year over year to $5.69 billion. The gross margin expanded 103 basis points (bps) to 55.5%.
SG&A expenses were down 8.4% year over year to $2.72 billion. R&D expenses decreased 3.4% year over year to $700 million. The company reported an adjusted operating profit of $2.26 billion in the quarter under review, up 25.6% year over year. Also, the adjusted operating margin expanded 424 bps to 22.1%.
2024 Guidance
Full-year adjusted earnings (excluding specified items of $1.30 per share) are expected in the range of $4.50-$4.70 per share. The Zacks Consensus Estimate is pegged at $4.62.
Abbott projects full-year 2024 organic sales growth, excluding COVID-19 testing-related sales, in the range of 8.0% to 10.0%. The Zacks Consensus Estimate for sales is currently pegged at $41.55 billion.
Our Take
Abbott delivered better-than-expected revenues and in-line earnings for the fourth quarter of 2023. The figures improved on a year-over-year basis.
On a positive note, broad-based growth witnessed in the underlying base business is highly appreciating. In 2023, Abbott continued to recapture market share in the U.S. infant formula market. The company has now reclaimed its previous market-leading position, as measured on a volume basis.
Meanwhile, declines in COVID-19 testing-related sales continue to affect Diagnostics sales growth, which adds to our concern.
Zacks Rank and Other Key Picks
Abbott currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the broader medical space are SiBone (SIBN - Free Report) , Surgery Partners (SGRY - Free Report) and Haemonetics (HAE - Free Report) , each carrying a Zacks Rank 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for SiBone’s fourth-quarter 2023 bottom line is pegged at a loss of 28 cents, implying a 12.9% improvement from the year-ago period. The consensus estimate for revenues is pegged at $38.6 million, suggesting 20.8% growth from the fourth quarter of 2022.
SiBone has an estimated long-term earnings growth rate of 14.9% compared with the industry’s 13.4% growth. SIBN’s earnings surpassed estimates in all the trailing four quarters, the average being 24.21%.
Estimates for Surgery Partners’ fourth-quarter 2023 EPS are pegged at 37 cents, implying a 37% improvement from the year-ago period. Revenues are projected to be $741.5 million, suggesting 4.9% growth from the fourth quarter of 2022.
Surgery Partners’ 2024 earnings growth rate is predicted to be 4.8%, while the revenue growth rate is estimated to be 9.2%. SGRY’s earnings surpassed estimates in all the trailing four quarters, the average being 316.07%.
Haemonetics is expected to report third-quarter fiscal 2024 EPS of 97 cents, implying a 14.1% improvement from the year-ago period. Projected revenues of $322.5 million suggest 5.6% growth from the fiscal third quarter of 2023.
Haemonetics has a historical long-term earnings growth rate of 9.4% compared with the industry’s 7.5% growth. HAE’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 16.08%.