Abbott Laboratories' ABT Medical Devices business has been gaining momentum on the back of solid sub-segmental performance.
We expect this strength to get reflected in first-quarter 2019 results, which are scheduled for release on Apr 17, before market open.
Click here to know how the company is likely to perform in the quarter to be reported.
Medical Devices Segment in Focus
Abbott's Medical Devices segment presently comprises the new Cardiovascular and Neuromodulation, Heart Failure, Electrophysiology, Structural Heart, Rhythm Management, Vascular businesses as well as the Diabetes Care business.
Management expects Medical Devices' first-quarter 2019 sales to grow at a high single-digit rate owing to continued double-digit growth in certain sub-segments.
Abbott Laboratories Price and EPS Surprise
Abbott Laboratories Price and EPS Surprise | Abbott Laboratories Quote
For Medical Devices' revenues in the United States, the Zacks Consensus Estimate is pegged at $1.3 billion, mirroring a 9% increase from the year-ago quarter. Internationally, the consensus estimates of $1.6 billion reflect 4.7% growth.
In the las t report ed quarter, sales improvement at the segment was driven by solid growth in the Electrophysiology, Structural Heart and Diabetes Care sub-segments. Moreover, the company received approvals for a few products alongside achieving clinical trial milestones.
Let's see how things are shaping up within each of the Medical Devices' sub-segments before first-quarter results.
Electrophysiology , which accounted for 15.2% of Medical Devices revenues in fourth-quarter 2018, has been gaining significantly from its robust performance in cardiac mapping and ablation catheters. The trend is expected to continue in the first quarter of 2019.
The company also broadened its product portfolio at this segment with the launch of its Advisor HD Catheter that creates highly detailed maps of the heart.
In January 2019, Abbott's TactiCath Contact Force Ablation Catheter, Sensor Enabled (a new catheter designed to help physicians treat atrial fibrillation with precision and efficiency) received FDA approval.
According to Abbott, these product launches should further strengthen the company's competitive position in the highly under-penetrated Electrophysiology market. Both the developments are expected to fuel the company's growth in the first quarter of 2019.
The Zacks Consensus Estimate for Electrophysiology revenues of $392 million indicates a 0.26% rise from the year-ago period. The company is expected to consistently benefit from this business.
The Structural Heart business has maintained an impressive top-line performance. In the last reported quarter, this business accounted for 11.2% of total revenues, under the broader Medical Devices segment. The upside can be attributed to strong performances by Abbott's diverse portfolio of products like Mitra Clip and AMPLATZER PFO Occluder. Both of these products are expected to drive revenues at the Medical Devices segment in the to-be-reported quarter as well.
The Zacks Consensus Estimate for Structural Heart revenues of $318 million reflects an 8.5% rise from the year-ago quarter.
Diabetes Care accounted for 18.2% of Medical Devices' revenues in fourth-quarter 2018. On a reported basis, it registered international sales growth of 28.3% in the prior quarter driven by Abbott's FreeStyle Libre. The company has been gaining from the launch of FreeStyleLibre in Europe as well. Banking on the continued uptake of the product, the segment is anticipated to witness consistent growth in the to-be-reported quarter.
The Zacks Consensus Estimate for Diabetes Care revenues of $537 million indicates a 27.5% improvement from the year-ago quarter number.
The Rhythm Management and Vascular sub-segments have been performing steadily despite a previous dip in performance. The launch of the XIENCE Sierra within the Vascular sub-segment is expected to boost Abbott's Medical Devices segment in the first quarter of 2019.
Zacks Ranks and Key Picks
Abbott currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Cerner Corporation CERN has an Earnings ESP of +1.05% and a Zacks Rank #2 (Buy). The company reported fourth-quarter 2018 adjusted earnings of 63 cents per share, in line with the Zacks Consensus Estimate. The bottom line increased from the prior-year quarter's figure by 8.6%. Meanwhile, revenues totaled $1.37 billion, which improved 3.9% year over year but fell short of the Zacks Consensus Estimate of $1.39 billion.
Thermo Fisher Scientific Inc. TMO has an Earnings ESP of +0.26% and a Zacks Rank of 2. In fourth-quarter 2018, the company's adjusted earnings per share (EPS) came in at $3.25, beating the Zacks Consensus Estimate of $3.19 by 1.9%. The figure also improved from the year-ago quarterly figure by 16.5%. Revenues grossed $6.51 billion, up 7.6% year over year and also outpaced the Zacks Consensus Estimate of $6.24 billion.
Stryker Corporation SYK has an Earnings ESP of +0.35% and a Zacks Rank #3. The company delivered fourth-quarter 2018 adjusted earnings per share (EPS) of $2.18, outpacing the Zacks Consensus Estimate by 1.4%. Earnings also improved 11.2% year over year and were at the high end of the company's guidance. Meanwhile, revenues totaled $3.80 billion, which surpassed the Zacks Consensus Estimate of $3.73 billion and also increased 9.4% on a year-over-year basis and 11.3% at constant currency (cc).
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