Abbott Laboratories (ABT): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report


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Abbott Laboratories reported third-quarter 2014 earnings of $0.54 per share, up 22.7% from the year-ago quarter. Abbott agreed to sell its developed markets generics pharmaceutical business to Mylan in Jul 2015. Hence, this business has been reported as discontinued operations. Including the discontinued operations, earnings came in at $0.62 per share, up 12.7% year over year. The Zacks Consensus Estimate was $0.60. Sales of $5.1 billion missed the Zacks Consensus Estimate of $5.6 billion. We expect the sale of the branded generics business to positively impact the top and bottom lines as Abbott now intends to focus on its branded generics pharmaceuticals business in emerging markets. An improved performance for the nutrition business should also boost investor confidence. We have, therefore, maintained a Neutral recommendation.


Abbott Laboratories discovers, develops, manufactures and sells a diversified line of health care products. On Jan 1, 2013, Abbott separated its pharmaceutical business into a new company called AbbVie. The research-based pharmaceutical company, AbbVie, comprises proprietary pharmaceuticals and biologics.

Abbott's shareholders received one share of AbbVie common stock on Jan 1, 2013 for every one share of Abbott common shares held as of the close of business on Dec 12, 2012. Abbott now comprises four businesses, namely Established Pharmaceuticals Division (EPD), Medical Devices, Diagnostics and Nutritionals.

The Established Pharmaceuticals Division (EPD) is the company's branded generics business. This segment generates sales outside the US from a growing portfolio of hundreds of products. Of the total EPD sales, 60% are from emerging markets and 40% from developed markets.

Medical Devices includes the diabetes care, vision care and vascular businesses.

The Diagnostics segment manufactures and markets diagnostic systems and tests, which are sold worldwide to blood banks, hospitals, commercial laboratories and alternate-care testing sites. The segment operates in three business lines core laboratory, molecular and point of care.

The Nutritional Products segment includes a broad line of pediatric and adult nutritional products, which are manufactured, marketed and sold on a worldwide basis. Key brands are Similac, Ensure, Pedialyte and Glucerna.

Abbott generated sales of approximately $21.8 billion in 2013.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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