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Abbott Labs (ABT) Up 10.8% Since Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Abbott Laboratories (ABT - Free Report) . Shares have added about 10.8% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Recent Earnings
Abbott Laboratories reported fourth-quarter 2016 earnings from continuing operations of $0.65 per share, $0.01 higher than the Zacks Consensus Estimate and up 4.8% year over year. Full-year 2016 adjusted earnings came in at $2.20 per share, in line with the Zacks Consensus Estimate. However, it remained ahead of the year-ago number by 2.3%.
Fourth-quarter sales came in at $5.33 billion, up 2.8% year over year on a reported basis. The quarterly figure is almost in line with the Zacks Consensus Estimate. The top line was, however, impacted 1% by unfavorable foreign exchange movement.
Worldwide sales for the full year came in at $20.85 billion, up 2.2% year over year on a reported basis. However, the figure is nearly in line with the Zacks Consensus Estimate.
Quarter in Detail
Abbott Labs operates through four segments – Established Pharmaceuticals Division (EPD), Medical Devices, Nutrition and Diagnostics.
EPD sales were up 10.6% on a reported basis to $979 billion. There was a negative impact of 2% due to currency fluctuations. Sales in key emerging markets increased 10.6% driven by double-digit growth in BRIC that comprises approximately 45% of Abbott's Established Pharmaceuticals sales, as well as strong growth in several countries throughout Latin America, including Colombia, Mexico, Peru and Argentina.
The Medical Devices business generated sales of $1.35 billion, up 4.2% year over year on a reported basis. Vascular product sales were up 2.9% on the back of double-digit growth in MitraClip. Also strong sales growth in Abbott's Endovascular business was driven by vessel closure products and Supera.
Diabetes Care sales increased 4.5% on a reported basis (there was unfavorable 1.5% effect of foreign exchange),driven by continued consumer uptake of FreeStyle Libre. Sales of Medical Optics were up 7.7% on a reported basis (there was a favorable 0.8% effect of foreign exchange),backed by the recent launch of the Tecnis Symfony intraocular lenses in the U.S.
Nutrition sales decreased 3.7% year over year on a reported basis to $1.73 billion. Unfavorable foreign exchange impacted sales by 1.1%. Pediatric Nutrition sales decreased 5.4% on a reported basis. Adult Nutrition sales decreased 1.4% on a reported basis led by year-over-year difficult comparison of Ensure.
Diagnostics sales increased 2.9% year over year to $1.26 billion. While Core Laboratory sales increased 3.6%, Point of Care Diagnostics sales increased 8.1% on a reported basis. Molecular Diagnostics sales were down 7.6% as growth in the infectious disease testing business was partially offset by the planned scale-down of the genetics business.
2017 Guidance
Abbott Labs provided full-year 2017 guidance. The company currently forecasts earnings per share from continuing operations to remain within the range of $0.92 to $1.02. Adjusting certain net specified items for the full year of approximately $1.48 per share, adjusted earnings per share from continuing operations is expected to stay within the range of $2.40 to $2.50. The current Zacks Consensus Estimate is pegged at $2.54, at the midpoint of the projected range.
The company has also provided its first-quarter 2017 earnings per share guidance. Excluding certain specified items of $0.23 a share, projected adjusted earnings per share from continuing operations is expected to remain within $0.42 and $0.44 for the first quarter. The current Zacks Consensus Estimate remains at $0.50 a share for the first quarter, ahead of the forecasted range.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been two revisions lower for the current quarter. In the past month, the consensus estimate has shifted 13.31% downward due to these changes.
At this time, Abbott Lab's stock has an average Growth Score of 'C', though it is lagging a lot on the momentum front with an 'F'. However, the stock was allocated a grade of 'B' on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregte VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.
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Abbott Labs (ABT) Up 10.8% Since Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Abbott Laboratories (ABT - Free Report) . Shares have added about 10.8% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Recent Earnings
Abbott Laboratories reported fourth-quarter 2016 earnings from continuing operations of $0.65 per share, $0.01 higher than the Zacks Consensus Estimate and up 4.8% year over year. Full-year 2016 adjusted earnings came in at $2.20 per share, in line with the Zacks Consensus Estimate. However, it remained ahead of the year-ago number by 2.3%.
Fourth-quarter sales came in at $5.33 billion, up 2.8% year over year on a reported basis. The quarterly figure is almost in line with the Zacks Consensus Estimate. The top line was, however, impacted 1% by unfavorable foreign exchange movement.
Worldwide sales for the full year came in at $20.85 billion, up 2.2% year over year on a reported basis. However, the figure is nearly in line with the Zacks Consensus Estimate.
Quarter in Detail
Abbott Labs operates through four segments – Established Pharmaceuticals Division (EPD), Medical Devices, Nutrition and Diagnostics.
EPD sales were up 10.6% on a reported basis to $979 billion. There was a negative impact of 2% due to currency fluctuations. Sales in key emerging markets increased 10.6% driven by double-digit growth in BRIC that comprises approximately 45% of Abbott's Established Pharmaceuticals sales, as well as strong growth in several countries throughout Latin America, including Colombia, Mexico, Peru and Argentina.
The Medical Devices business generated sales of $1.35 billion, up 4.2% year over year on a reported basis. Vascular product sales were up 2.9% on the back of double-digit growth in MitraClip. Also strong sales growth in Abbott's Endovascular business was driven by vessel closure products and Supera.
Diabetes Care sales increased 4.5% on a reported basis (there was unfavorable 1.5% effect of foreign exchange),driven by continued consumer uptake of FreeStyle Libre. Sales of Medical Optics were up 7.7% on a reported basis (there was a favorable 0.8% effect of foreign exchange),backed by the recent launch of the Tecnis Symfony intraocular lenses in the U.S.
Nutrition sales decreased 3.7% year over year on a reported basis to $1.73 billion. Unfavorable foreign exchange impacted sales by 1.1%. Pediatric Nutrition sales decreased 5.4% on a reported basis. Adult Nutrition sales decreased 1.4% on a reported basis led by year-over-year difficult comparison of Ensure.
Diagnostics sales increased 2.9% year over year to $1.26 billion. While Core Laboratory sales increased 3.6%, Point of Care Diagnostics sales increased 8.1% on a reported basis. Molecular Diagnostics sales were down 7.6% as growth in the infectious disease testing business was partially offset by the planned scale-down of the genetics business.
2017 Guidance
Abbott Labs provided full-year 2017 guidance. The company currently forecasts earnings per share from continuing operations to remain within the range of $0.92 to $1.02. Adjusting certain net specified items for the full year of approximately $1.48 per share, adjusted earnings per share from continuing operations is expected to stay within the range of $2.40 to $2.50. The current Zacks Consensus Estimate is pegged at $2.54, at the midpoint of the projected range.
The company has also provided its first-quarter 2017 earnings per share guidance. Excluding certain specified items of $0.23 a share, projected adjusted earnings per share from continuing operations is expected to remain within $0.42 and $0.44 for the first quarter. The current Zacks Consensus Estimate remains at $0.50 a share for the first quarter, ahead of the forecasted range.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been two revisions lower for the current quarter. In the past month, the consensus estimate has shifted 13.31% downward due to these changes.
Abbott Laboratories Price and Consensus
Abbott Laboratories Price and Consensus | Abbott Laboratories Quote
VGM Scores
At this time, Abbott Lab's stock has an average Growth Score of 'C', though it is lagging a lot on the momentum front with an 'F'. However, the stock was allocated a grade of 'B' on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregte VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.