It has been about a month since the last earnings report for Abbott Laboratories ABT. Shares have lost about 3.1% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? 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.
Q2 Earnings
Abbott reported second-quarter 2017 adjusted earnings from continuing operations of $0.62 per share, 3.3% higher than the Zacks Consensus Estimate and up 12.7% year over year. This adjusted quarterly number also remained ahead of the company’s guidance range of $0.59 to $0.61.
Reported earnings for the quarter came in at $0.15 per share, way below the year-ago number of $0.40.
Second-quarter worldwide sales came in at $6.63 billion, up 24.4% year over year on a reported basis. This quarterly figure also marginally in line with the Zacks Consensus Estimate of $6.62 billion.
On a comparable operational basis (adjusting the impact of foreign exchange, certain acquisitions and divestments), sales increased 2.9% year over year in the reported quarter.
Quarter in Detail
Abbott Labs operates through four segments – Established Pharmaceuticals Division (EPD), Medical Devices, Nutrition and Diagnostics.
EPD sales were up 4.1% on a reported basis (up 3.5% on comparable operational basis) to $1,021 billion. There was a positive impact of 0.6% on the back of currency fluctuations. Sales in key emerging markets increased 5.8% (up 4.6%), driven by strong growth in Russia, China and several countries across Latin America. However, this positive effect was partially offset by the impact associated with implementation of a new Goods and Services Tax (GST) system in India.
The Medical Devices business sales spiked 89.2% on a reported basis to $2.59 billion. However, on a comparable operational basisexcluding the impact from the favorable resolution of a third-party royalty agreement last year, sales increased 3.2%.
Cardiovascular and Neuromodulation sales soared 189% on a reported basis (up 0.9% on comparable operational basis) on growth in Electrophysiology, Structural Heart and Neuromodulation. Vascular product sales were up 6%, while Structural Heart business grew 9.1% year over yearon a comparable operational basis.
Diabetes Care sales improved 18.7% on a reported basis (up 21.3%), driven by double-digit international sales growth, led by continued consumer uptake of FreeStyle Libre — the revolutionary continuous glucose monitoring system of Abbott Labs.
Nutrition sales slipped 0.6% year over year on a reported basis (up 0.5% on a comparable operational basis). Unfavorable foreign exchange impacted sales by a marginal 1.1%. Pediatric Nutrition sales increased 2.5% on a comparable operational basis. Adult Nutrition sales however, decreased 2% on a comparable operational basis.
Diagnostics sales rose 3.8% year over year (up 5.4% on a comparable operational basis). While Core Laboratory sales increased 6.1%, Point of Care Diagnostics sales grew 8.9%, both on a comparable operational basis. Molecular Diagnostics sales were down 4.1% as strong growth in the infectious disease testing business was partially offset by the planned scale-down of the genetics business.
2017 Guidance
Abbott Labs raised its full-year 2017 guidance. The company forecasts earnings per share from continuing operations to remain within the range of $1.03 to $1.13 from earlier range of $0.92 to $1.02. Adjusting certain net specified items for the full year, the adjusted earnings per share from continuing operations are expected to stay within a band of $2.43-$2.53 (earlier guidance was $2.40-$2.50). The current Zacks Consensus Estimate is pegged at $2.47, at the midpoint of the projected range.