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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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Earnings Preview: Mixed bag for Morgan Stanley this Q3

Muted trading could really affect Morgan Stanley (MS) earnings that is scheduled to release Tuesday. With slowing trading activities, revenue might dip due to the slump in trading income.

Significant volatility and the bull market did help the financial giant in the first half of the year, but client activity has been low in the quarter due to the expectation of inflation, Fed policies, and the prospective trade war.

Morgan Stanley second quarter 2018 earnings

According to Thomson Reuters I/B/E/S, Morgan Stanley is expected to record a profit of $1.02 a share on $9.56 billion in third-quarter revenue. Last year same quarter, the financial company made a $0.93-a-share profit on $9.2 billion in revenue.

However, you can expect fixed-income trading revenues to slide at least 17.5% sequentially to $1.14 billion. Third quarter trading revenue might be in the vicinity of $2.9 billion, lower than the second quarter.

But all is not lost for Morgan Stanley as robust M&A deals might bolster its advisory fees and might hit closer to $0.6 billion. The rate hikes could also see a bump in interest income and overall loan demand.

On the other hand, the seasonal slowdown might affect underwriting fees, especially due to trade-war fears, The interest rate hikes by the Feds could also have led to lower issuances of debt which makes up much of the underwriting fee.

Compensations are set to play another important part in the earnings as Morgan Stanley reports tomorrow. Watch out for specific items that have been mentioned above and follow our details coverage this earnings season.

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