Can Balanced Segmental Growth Aid Abbott (ABT) Q3 Earnings?
Zacks Investment Research | Oct 13, 2019 11:43PM ET
Abbott Laboratories (NYSE:ABT) is slated to report third-quarter 2019 results on Oct 16, before the market opens. In the last reported quarter, the company came up with a positive surprise of 2.5%. Abbott delivered positive surprises in three of the trailing four quarters, the average beat being 1.78%.
Let's see, how things are shaping up for this announcement.
Factors at Play
Over the last few quarters, Abbott has been riding high on a healthy growth curve within its Diabetes Care business. The company has been hogging the limelight for developments in its flagship, sensor-based continuous glucose monitoring (CGM) system — FreeStyle Libre System. This upside is likely to reflect on the upcoming quarterly results
Notably, in the last reported quarter, Diabetes Care sales surged at a stupendous rate (up 35.3% year over year organically), led by FreeStyle Libre. Libre is once again expected to have performed exceptionally well, registering strong worldwide sales in the to-be-reported quarter.
According to Abbott, FreeStyle Libre has achieved global leadership in CGM systems for both Type 1 and Type 2 users. In order to meet higher demand for Libre, Abbott is currently adding a significant amount of new manufacturing capacity, which is gradually coming online, starting from the third quarter of 2019 onward. This might reflect on the company’s third-quarter performance throughout.
Meanwhile, in September, the company announced its newly-formed alliance with Sanofi (PA:SASY) to integrate glucose sensing and insulin delivery technologies. The two companies are developing tools that combine Abbott’s FreeStyle Libre technology with Sanofi′s insulin dosing information for future smart pens, insulin titration apps and cloud software. This new development is expected to have contributed to the company’s third-quarter top line.
The Zacks Consensus Estimate of $640 million for third-quarter Diabetes Care revenues indicates a rise of 25% from the year-ago reported figure.
Alike the prior reported quarter, Abbott in the impending quarterly release is anticipated to gain from a solid performance by the Established Pharmaceuticals Division (EPD) business, which has been recording operational sales growth over the last few quarters. Per Abbott, its EPD business is growing at a faster pace than the market rate across the key emerging markets that represent the most attractive long-term growth pertaining to its branded generics portfolio. These include India, Brazil, Russia and China among others.
Abbott Laboratories Price and EPS Surprise
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