Abbott Laboratories: Solid product line expected to boost Q3 results

There are few pharmaceutical companies as solid as Abbott Laboratories (NYSE: ABT). Thanks to the two major acquisitions it made a couple of years ago – St. Jude Medical and Alere – the company currently has a strong and diversified product line.

The stock has doubled in the past two years, and notably, the growth has been steady and consistent throughout this period.

Abbott will announce its third-quarter financial results on Wednesday, October 16, before the opening bell and the market is quite optimistic. Wall Street expects revenues to grow at a modest 6% to $8.11 billion, riding on the strong performance of the medical devices unit. The management had last quarter stated that it expects the pharmaceutical and diagnostics units also to improve in the second half of the financial year.

Analysts expect EPS to increase by 9 cents year-over-year to $0.84, in line with the company’s projection range of $0.83 to $0.85. Abbott views GAAP EPS between $0.53 and $0.55. The company has surpassed bottom-line estimates in two of the past four quarters while coming in line during the other two occasions.

Earlier this year, the Illinois-based firm had received FDA’s approvals for MitraClip G4, its fourth-generation heart valve repair device, and Alinity-S diagnostics system, a technology to screen and protect plasma supply. The market expects a positive impact from both these approvals in the current quarter results.

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Abbott’s ability to expand net income margins in line with the revenue increase, as well as the payout of earnings in the form of dividends make it even more attractive.

In Q2

Abbott’s second-quarter earnings topped estimates, while revenue came in line with the expectations.  The company had also lifted its earnings guidance for the full-year 2019, expecting to see some acceleration in the second half.

Abbott had projected full-year 2019 GAAP earnings to be between $2.06 to $2.12 per share. Adjusted EPS from continuing operations is predicted in the range of $3.21 to $3.27.

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