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Will Low Product Revenues Impact Abbott (ABT) Q1 Earnings?
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Abbott Laboratories (ABT - Free Report) is slated to report first-quarter 2020 results on Apr 16, before the market opens.
In the last reported quarter, the company reported in-line earnings. Over the trailing four quarters, its earnings were in line with the Zacks Consensus Estimate on two occasions and exceeded in the other two, the average positive beat being 1.45%.
Let's see how things are shaping up prior to this announcement.
Factors at Play
Shares of Abbott have been on a declining trend for the past couple of months like most stocks in the industry. The coronavirus outbreak has massively disrupted the global supply chain. Hence, Abbott, which has a huge international base, is expected to have seen a significant fall in its quarterly revenues.
Meanwhile, on Mar 18, Abbott announced the launch of its m2000RealTime SARS-CoV-2 EUA test, which runs on the m2000 RealTime System located in hospitals and reference labs, globally. Between the two platforms, the company expects to produce about 5 million tests per month.
Not just this, the company also announced receiving the FDA’s Emergency Use Authorization (EUA) for its molecular point-of-care test — ID NOW COVID-19 — for the detection of coronavirus, making it the fastest-available molecular point-of-care test available till date. Delivering positive results in just five minutes (and negative results in 13 minutes), this test has already received enormous market acceptance on a global basis.
Although both tests were rolled out in the later part of the March-end quarter, these are expected to have contributed to the company’s global Diagnostics business’ quarterly revenues.
The Zacks Consensus Estimate of $1.91 billion for Diagnostic revenues suggests a 3.9% improvement from the figure registered in the comparable quarter last year.
We, however, expect revenues to have declined in the company’s Diabetes Care business, which was, otherwise, on a substantially strong growth trajectory. Abbott has been in the limelight for developments in its flagship, sensor-based continuous glucose monitoring (CGM) system, widely known as the FreeStyle Libre System. In the last reported quarter too, this business registered 35% growth backed by FreeStyle Libre, which recorded a year-over-year surge of 62.4%, organically, in global sales.
This business continued to do well, contributing significantly to the company’s top line, until the pandemic rattled global markets. In this line, in February, Abbott formed an alliance with insulin management system maker — Insulet Corporation — to integrate its continuous glucose monitoring (CGM) technology with Insulet's Omnipod Horizon Automated Insulin Delivery (AID) System, in order to provide improved insulin delivery. This news received a positive response from the stakeholders.
Nevertheless, this business too, having a strong global setup, might have been affected by the supply-chain disruption worldwide during the period under discussion. Moreover, we expect the company’s diabetes-management product sales to have declined during this period, when most countries were either on lockdowns or were focused on providing healthcare support to specifically control the coronavirus-induced damages.
The coronavirus crisis is expected to have affected alike Diabetes management, which is part of the company’s broader Medical Devices business, as well as other subcategories like vision care and vascular arms during the to-be-reported quarter. However, the magnitude of this loss is not clear to us and we await the company’s earnings call.
The company’s Nutrition business thatincludes a broad range of pediatric and adult nutritional products, however, might keep gaining strength on rising demand for these products amid this severe health hazard worldwide. It is a rapidly-growing business of Abbott, owing to the aging population, increasing rate of chronic diseases and the rise of the middle class in emerging markets.
Which Way are the Estimates Treading?
For first-quarter 2020, the Zacks Consensus Estimate for total revenues of $7.48 billion calls for a 0.7% decline from the prior-year reported figure. Also, the consensus estimate for earnings is pegged at 60 cents, indicating a 4.8% fall, year on year.
Earnings Whispers
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, has good chances of beating estimates. This is not the case as you can see:
Zacks Rank: Abbott currently carries a Zacks Rank #4 (Sell).
Earnings ESP: Abbott has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks Worth a Look
Here are a few medical stocks worth considering as these have the right combination of elements to beat on earnings this reporting cycle.
Cardinal Health, Inc. (CAH - Free Report) has an Earnings ESP of +1.03% and flaunts a Zacks Rank of 1, at present.
DexCom, Inc. (DXCM - Free Report) has an Earnings ESP of +143.90% and currently carries a Zacks Rank #2.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.5% per year.
These 7 were selected because of their superior potential for immediate breakout.
Image: Bigstock
Will Low Product Revenues Impact Abbott (ABT) Q1 Earnings?
Abbott Laboratories (ABT - Free Report) is slated to report first-quarter 2020 results on Apr 16, before the market opens.
In the last reported quarter, the company reported in-line earnings. Over the trailing four quarters, its earnings were in line with the Zacks Consensus Estimate on two occasions and exceeded in the other two, the average positive beat being 1.45%.
Let's see how things are shaping up prior to this announcement.
Factors at Play
Shares of Abbott have been on a declining trend for the past couple of months like most stocks in the industry. The coronavirus outbreak has massively disrupted the global supply chain. Hence, Abbott, which has a huge international base, is expected to have seen a significant fall in its quarterly revenues.
Meanwhile, on Mar 18, Abbott announced the launch of its m2000RealTime SARS-CoV-2 EUA test, which runs on the m2000 RealTime System located in hospitals and reference labs, globally. Between the two platforms, the company expects to produce about 5 million tests per month.
Not just this, the company also announced receiving the FDA’s Emergency Use Authorization (EUA) for its molecular point-of-care test — ID NOW COVID-19 — for the detection of coronavirus, making it the fastest-available molecular point-of-care test available till date. Delivering positive results in just five minutes (and negative results in 13 minutes), this test has already received enormous market acceptance on a global basis.
Although both tests were rolled out in the later part of the March-end quarter, these are expected to have contributed to the company’s global Diagnostics business’ quarterly revenues.
Abbott Laboratories Price and EPS Surprise
Abbott Laboratories price-eps-surprise | Abbott Laboratories Quote
The Zacks Consensus Estimate of $1.91 billion for Diagnostic revenues suggests a 3.9% improvement from the figure registered in the comparable quarter last year.
We, however, expect revenues to have declined in the company’s Diabetes Care business, which was, otherwise, on a substantially strong growth trajectory. Abbott has been in the limelight for developments in its flagship, sensor-based continuous glucose monitoring (CGM) system, widely known as the FreeStyle Libre System. In the last reported quarter too, this business registered 35% growth backed by FreeStyle Libre, which recorded a year-over-year surge of 62.4%, organically, in global sales.
This business continued to do well, contributing significantly to the company’s top line, until the pandemic rattled global markets. In this line, in February, Abbott formed an alliance with insulin management system maker — Insulet Corporation — to integrate its continuous glucose monitoring (CGM) technology with Insulet's Omnipod Horizon Automated Insulin Delivery (AID) System, in order to provide improved insulin delivery. This news received a positive response from the stakeholders.
Nevertheless, this business too, having a strong global setup, might have been affected by the supply-chain disruption worldwide during the period under discussion. Moreover, we expect the company’s diabetes-management product sales to have declined during this period, when most countries were either on lockdowns or were focused on providing healthcare support to specifically control the coronavirus-induced damages.
The coronavirus crisis is expected to have affected alike Diabetes management, which is part of the company’s broader Medical Devices business, as well as other subcategories like vision care and vascular arms during the to-be-reported quarter. However, the magnitude of this loss is not clear to us and we await the company’s earnings call.
The company’s Nutrition business thatincludes a broad range of pediatric and adult nutritional products, however, might keep gaining strength on rising demand for these products amid this severe health hazard worldwide. It is a rapidly-growing business of Abbott, owing to the aging population, increasing rate of chronic diseases and the rise of the middle class in emerging markets.
Which Way are the Estimates Treading?
For first-quarter 2020, the Zacks Consensus Estimate for total revenues of $7.48 billion calls for a 0.7% decline from the prior-year reported figure. Also, the consensus estimate for earnings is pegged at 60 cents, indicating a 4.8% fall, year on year.
Earnings Whispers
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, has good chances of beating estimates. This is not the case as you can see:
Zacks Rank: Abbott currently carries a Zacks Rank #4 (Sell).
Earnings ESP: Abbott has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks Worth a Look
Here are a few medical stocks worth considering as these have the right combination of elements to beat on earnings this reporting cycle.
Chemed Corporation (CHE - Free Report) has an Earnings ESP of +1.78% and currently sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cardinal Health, Inc. (CAH - Free Report) has an Earnings ESP of +1.03% and flaunts a Zacks Rank of 1, at present.
DexCom, Inc. (DXCM - Free Report) has an Earnings ESP of +143.90% and currently carries a Zacks Rank #2.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.5% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>