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Pharma, medical devices units to drive Abbott’s Q3 results

Healthcare giant Abbott Laboratories (ABT) is set to report third-quarter results on Wednesday at 7:45 am EDT. Analysts project earnings to increase by 13.6% to $0.75 per share and revenue to grow 12% to $7.65 billion for the quarter.

A majority of the analysts recommend a “Strong Buy” or “Buy” rating with an average price target of $76.31. The company had earlier surprised investors with upbeat results in the past four quarters.

Related: Abbott Q2 2018 Earnings Call Transcript

Abbott anticipates 2017 portfolio addition Rapid Diagnostics to contribute $500 million to its top line. However, during this quarter, revenue will be impacted by currency headwinds of about 2%, which will shrink organic sales growth. The organic sales were anticipated to rise in the mid-to-high single digits range.

The company’s segments Medical Devices, Established Pharmaceuticals, and Diagnostics are anticipated to yield lesser return during the third quarter compared to the last quarter as the company expects mid-to-high-single-digit sales growth from the segments. Nutrition segment sales are likely to be in the mid-single-digit growth range.

For the third quarter, the synergies of the Alere purchase is likely to be the driver of the diagnostic business, while the strong FreeStyle Libre device demand continues to back medical devices business. Strong growth in Greater China and Latin America continue to drive geographical sales. Abbott is expected to revise or update its full-year 2018 guidance based on the third quarter performance.

The company’s peers Johnson & Johnson (JNJ) is expected to report upbeat results for the third quarter on Tuesday. Investors will be keenly watching sales figures from Johnson & Johnson’s oncology drugs section. The company will be looking at growth in Pharmaceutical and Medical Devices businesses to drive the stock upward.

Related: Biosimilars might haunt Johnson & Johnson in Q3 as well

Additionally, its other competitors to the likes of Boston Scientific (BSX) and Edwards Lifesciences (EW) are expected to post earnings growth of 9.7% and 21.4% respectively for their upcoming quarter releases during next week.

Shares of Abbott ended Monday’s regular session down 0.65% at $68.88 on the NYSE. The stock has risen over 26% in the past year and over 20% in the year so far.

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