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Here's How Abbott (ABT) is Placed Ahead of Q2 Earnings Release
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Abbott Laboratories (ABT - Free Report) is slated to report its second-quarter 2024 results on Jul 18, before the opening bell.
The company posted adjusted earnings per share (EPS) of 98 cents in the last quarter, which topped the Zacks Consensus Estimate by 2.08%. In the trailing four quarters, its earnings exceeded the Zacks Consensus Estimate on all four occasions, the average beat being 2.39%.
Q2 Estimates
The Zacks Consensus Estimate for ABT’s second-quarter 2024 revenues is pegged at $10.35 billion. This suggests a 3.8% rise from the year-ago reported figure.
The Zacks Consensus Estimate for its second-quarter 2024 EPS of $1.10 indicates a 1.9% improvement from the 2023 comparable figure.
Estimate Revision Trend Ahead of Earnings
Estimates for Abbott’s Q2 earnings remained unchanged at $1.10 per share in the past 60 days.
Let's briefly look at how things have progressed for the MedTech major leading up to this announcement.
Factors at Play
Established Pharmaceuticals (EPD)
Abbott’s EPD business consistently benefits from offering a broad portfolio of products that are designed to meet the local needs of fast-growing emerging markets. In the second quarter of 2024, the division is likely to have held its impressive streak of strong performance across several regions and therapeutic areas, including respiratory, women's health and central nervous system/pain management.
Similar to the past quarters, the performance may have boosted Abbott’s overall profitability and led to solid margin expansion. In addition, the company is likely to have advanced with its plan to introduce biosimilars in key emerging markets. These breakthrough treatment options focused on oncology, women's health and respiratory diseases enhance its existing branded generic medicines portfolio.
The Zacks Consensus Estimate for the segment’s revenues shows a year-over-year increase of 1.3% in the second quarter of 2024.
Diagnostics
The Diagnostics arm is expected to have been driven by the widespread adoption of its top-tier systems and high testing demand across a variety of settings, including hospitals, laboratories, physician offices, retail pharmacies and blood screening facilities. In the core lab business, the continued rollout of Abbott's Alinity testing platform and increased routine diagnostic testing are likely to have boosted the revenues in the to-be-reported quarter. Furthermore, the new FDA-approved i-STAT TBI Plasma test may have favorably impacted the Point of Care diagnostics sales.
Meanwhile, the demand for COVID-19 testing nosedived over the past several quarters and marred the segment’s growth. We expect to see another quarter of year-over-year decline in Diagnostics revenue this time. However, the magnitude of this decline may have reduced because, during the second quarter of 2023, Diagnostic revenues were already soft and on a downward trend (in May 2023, WHO declared an end to COVID-19 as a public health emergency).
Going by the Zacks Consensus Estimate, Diagnostics revenues are likely to have decreased 4.4% year over year in the second quarter of 2024.
The segment has been a standout performer for the company, steadily growing over the last several quarters and making a notable impact on the margin performance. In the second quarter of 2024, the business’ sales are likely to have been led by the diabetes care division. This is expected to have been driven by the Freestyle Libre sensing technology, which alone surged 23% in the first quarter. We assume Abbott to have capitalized on Libre’s substantial growth opportunities to maintain its strong sales momentum. In addition, the new Lingo and Libre Rio over-the-counter CGM systems, both of which were FDA-cleared in early June, are also expected to have positively boosted the company’s second-quarter revenues.
Turning to Abbott’s Cardiovascular business, the electrophysiology portfolio is likely to have delivered robust performance across the key regions and product categories, particularly in the ablation catheters and cardiac mapping areas. In April, the company secured the FDA’s approval for the first-of-its-kind innovation for people with chronic limb-threatening ischemia below the knee.
Within Structural Heart, we expect the company to report robust performance in the high-growth areas, including TAVR, mitral and tricuspid repair, while newer products such as Navitor, Amulet, and TriClip, along with the prime MitraClip, are likely to have registered strong sales as well.
Within the Rhythm Management arm, Abbott’s new leadless pacemaker, AVEIR, is making strides in dual chamber pacing, following its rapid success in the single chamber pacing segment. Furthermore, the growth in the Neuromodulation division may have been led by the sales of Eterna, a rechargeable neurostimulation device for pain management. All these developments are anticipated to have greatly boosted Abbott’s top line in the quarter under review.
According to the Zacks Consensus Estimate, the Medical device segment’s revenues are expected to improve 9.1% year over year in the second quarter.
Nutrition
In this division, sales of pediatric nutritionals are likely to have been robust as Abbott continues to capture market share in the infant formula business. We also anticipate solid growth across the international portfolio of infant formula, toddler, and adult nutrition brands in the second quarter of 2024.
Furthermore, Abbott’s new nutrition shake Protality may have positively impacted the Nutrition revenues. The product was launched earlier this year and features a formulation similar to the company’s popular Ensure Max Protein drink. The leading Ensure family of products is also likely to have significantly favored the top-line growth in the quarter under review.
The Zacks Consensus Estimate indicates a 3.5% improvement in the segment’s revenues in the second quarter compared to the same period in 2023.
What Our Model Suggests
Per our proven model, stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, have a higher chance of beating estimates. However, that is not the case here, as you can see below:
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.
Zacks Rank: The company 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 time:
HIMS’ earnings surpassed estimates in three of the trailing four quarters and missed the same once, with the average surprise being 79.17%. The Zacks Consensus Estimate for the company’s second-quarter EPS is expected to surge 266.7% from the year-ago quarter figure.
HCA Healthcare (HCA - Free Report) has an Earnings ESP of +7.10% and a Zacks Rank #2. The company is slated to release second-quarter 2024 results on Jul 23.
HCA’s earnings surpassed estimates in three of the trailing four quarters, with the average surprise being 5.64%. The Zacks Consensus Estimate for HCA Healthcare’s second-quarter EPS is expected to surge 15.9% from the year-ago quarter figure.
Enovis (ENOV - Free Report) has an Earnings ESP of +3.70% and a Zacks Rank #2. The company is likely to release second-quarter 2024 results on Aug 1.
The company’s earnings surpassed estimates in all the trailing four quarters, with the average surprise being 6.18%. The Zacks Consensus Estimate for ENOV’s 2024 second-quarter EPS is expected to improve 24.1% from the year-ago reported figure.
Image: Bigstock
Here's How Abbott (ABT) is Placed Ahead of Q2 Earnings Release
Abbott Laboratories (ABT - Free Report) is slated to report its second-quarter 2024 results on Jul 18, before the opening bell.
The company posted adjusted earnings per share (EPS) of 98 cents in the last quarter, which topped the Zacks Consensus Estimate by 2.08%. In the trailing four quarters, its earnings exceeded the Zacks Consensus Estimate on all four occasions, the average beat being 2.39%.
Q2 Estimates
The Zacks Consensus Estimate for ABT’s second-quarter 2024 revenues is pegged at $10.35 billion. This suggests a 3.8% rise from the year-ago reported figure.
The Zacks Consensus Estimate for its second-quarter 2024 EPS of $1.10 indicates a 1.9% improvement from the 2023 comparable figure.
Estimate Revision Trend Ahead of Earnings
Estimates for Abbott’s Q2 earnings remained unchanged at $1.10 per share in the past 60 days.
Let's briefly look at how things have progressed for the MedTech major leading up to this announcement.
Factors at Play
Established Pharmaceuticals (EPD)
Abbott’s EPD business consistently benefits from offering a broad portfolio of products that are designed to meet the local needs of fast-growing emerging markets. In the second quarter of 2024, the division is likely to have held its impressive streak of strong performance across several regions and therapeutic areas, including respiratory, women's health and central nervous system/pain management.
Similar to the past quarters, the performance may have boosted Abbott’s overall profitability and led to solid margin expansion. In addition, the company is likely to have advanced with its plan to introduce biosimilars in key emerging markets. These breakthrough treatment options focused on oncology, women's health and respiratory diseases enhance its existing branded generic medicines portfolio.
The Zacks Consensus Estimate for the segment’s revenues shows a year-over-year increase of 1.3% in the second quarter of 2024.
Diagnostics
The Diagnostics arm is expected to have been driven by the widespread adoption of its top-tier systems and high testing demand across a variety of settings, including hospitals, laboratories, physician offices, retail pharmacies and blood screening facilities. In the core lab business, the continued rollout of Abbott's Alinity testing platform and increased routine diagnostic testing are likely to have boosted the revenues in the to-be-reported quarter. Furthermore, the new FDA-approved i-STAT TBI Plasma test may have favorably impacted the Point of Care diagnostics sales.
Meanwhile, the demand for COVID-19 testing nosedived over the past several quarters and marred the segment’s growth. We expect to see another quarter of year-over-year decline in Diagnostics revenue this time. However, the magnitude of this decline may have reduced because, during the second quarter of 2023, Diagnostic revenues were already soft and on a downward trend (in May 2023, WHO declared an end to COVID-19 as a public health emergency).
Going by the Zacks Consensus Estimate, Diagnostics revenues are likely to have decreased 4.4% year over year in the second quarter of 2024.
Abbott Laboratories Price and EPS Surprise
Abbott Laboratories price-eps-surprise | Abbott Laboratories Quote
Medical Devices
The segment has been a standout performer for the company, steadily growing over the last several quarters and making a notable impact on the margin performance. In the second quarter of 2024, the business’ sales are likely to have been led by the diabetes care division. This is expected to have been driven by the Freestyle Libre sensing technology, which alone surged 23% in the first quarter. We assume Abbott to have capitalized on Libre’s substantial growth opportunities to maintain its strong sales momentum. In addition, the new Lingo and Libre Rio over-the-counter CGM systems, both of which were FDA-cleared in early June, are also expected to have positively boosted the company’s second-quarter revenues.
Turning to Abbott’s Cardiovascular business, the electrophysiology portfolio is likely to have delivered robust performance across the key regions and product categories, particularly in the ablation catheters and cardiac mapping areas. In April, the company secured the FDA’s approval for the first-of-its-kind innovation for people with chronic limb-threatening ischemia below the knee.
Within Structural Heart, we expect the company to report robust performance in the high-growth areas, including TAVR, mitral and tricuspid repair, while newer products such as Navitor, Amulet, and TriClip, along with the prime MitraClip, are likely to have registered strong sales as well.
Within the Rhythm Management arm, Abbott’s new leadless pacemaker, AVEIR, is making strides in dual chamber pacing, following its rapid success in the single chamber pacing segment. Furthermore, the growth in the Neuromodulation division may have been led by the sales of Eterna, a rechargeable neurostimulation device for pain management. All these developments are anticipated to have greatly boosted Abbott’s top line in the quarter under review.
According to the Zacks Consensus Estimate, the Medical device segment’s revenues are expected to improve 9.1% year over year in the second quarter.
Nutrition
In this division, sales of pediatric nutritionals are likely to have been robust as Abbott continues to capture market share in the infant formula business. We also anticipate solid growth across the international portfolio of infant formula, toddler, and adult nutrition brands in the second quarter of 2024.
Furthermore, Abbott’s new nutrition shake Protality may have positively impacted the Nutrition revenues. The product was launched earlier this year and features a formulation similar to the company’s popular Ensure Max Protein drink. The leading Ensure family of products is also likely to have significantly favored the top-line growth in the quarter under review.
The Zacks Consensus Estimate indicates a 3.5% improvement in the segment’s revenues in the second quarter compared to the same period in 2023.
What Our Model Suggests
Per our proven model, stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, have a higher chance of beating estimates. However, that is not the case here, as you can see below:
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.
Zacks Rank: The company 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 time:
Hims & Hers Health (HIMS - Free Report) has an Earnings ESP of +19.28% and a Zacks Rank #1. The company is expected to release second-quarter 2024 results on Aug 5. You can see the complete list of today’s Zacks #1 Rank stocks here.
HIMS’ earnings surpassed estimates in three of the trailing four quarters and missed the same once, with the average surprise being 79.17%. The Zacks Consensus Estimate for the company’s second-quarter EPS is expected to surge 266.7% from the year-ago quarter figure.
HCA Healthcare (HCA - Free Report) has an Earnings ESP of +7.10% and a Zacks Rank #2. The company is slated to release second-quarter 2024 results on Jul 23.
HCA’s earnings surpassed estimates in three of the trailing four quarters, with the average surprise being 5.64%. The Zacks Consensus Estimate for HCA Healthcare’s second-quarter EPS is expected to surge 15.9% from the year-ago quarter figure.
Enovis (ENOV - Free Report) has an Earnings ESP of +3.70% and a Zacks Rank #2. The company is likely to release second-quarter 2024 results on Aug 1.
The company’s earnings surpassed estimates in all the trailing four quarters, with the average surprise being 6.18%. The Zacks Consensus Estimate for ENOV’s 2024 second-quarter EPS is expected to improve 24.1% from the year-ago reported figure.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.