Abbott Laboratories ABT is slated to report its third-quarter 2024 results on Oct. 16, before the opening bell.
The company delivered adjusted earnings per share (EPS) of $1.14 in the last quarter, which topped the Zacks Consensus Estimate by 3.64%. In the trailing four quarters, its earnings exceeded the Zacks Consensus Estimate on all four occasions, the average beat being 2.34%.
Q3 Estimates
The Zacks Consensus Estimate for ABT’s third-quarter 2024 revenues is pegged at $10.56 billion. This suggests a 4.1% rise from the year-ago reported figure.
The Zacks Consensus Estimate for its third-quarter 2024 EPS of $1.20 indicates a 5.3% improvement from the 2023 comparable figure.
Estimate Revision Trend Ahead of Earnings
Estimates for Abbott’s Q3 earnings remained unchanged at $1.20 per share in the past 60 days.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Abbott Laboratories Price and EPS Surprise
Abbott Laboratories price-eps-surprise | Abbott Laboratories Quote
Let's briefly look at how things have progressed for the MedTech major leading up to this announcement.
Established Pharmaceuticals (EPD)
Abbott’s EPD business benefits from a broad portfolio of products that are designed to meet the local needs of fast-growing emerging markets. In the third quarter of 2024, the division is likely to have held its impressive streak of strong performance across several regions and therapeutic areas, including respiratory, women's health and central nervous system/pain management. Growth is expected to have been driven by favorable demographic trends, including increasing population, growing middle class and increasing focus on expanding access to healthcare.
Similar to the past quarters, the performance is likely to have been boosted by Abbott’s overall profitability and led to solid margin expansion. In addition, the company recently identified biosimilars as a new strategic growth pillar for EPD. Biosimilars currently represent the highest growth segment in the branded generic pharmaceutical market. With Abbott’s extensive presence in emerging markets, the company has a unique opportunity to scale a licensing model that is capital-efficient and can bring access to these life-changing medicines to millions of people in emerging markets.
The Zacks Consensus Estimate for the segment’s revenues indicates a year-over-year increase of 3.2% in the third quarter of 2024.
Diagnostics
The Diagnostics arm is expected to have been driven by the widespread adoption of its top-tier systems and high testing demand across a variety of settings, including hospitals, laboratories, physician offices, retail pharmacies and blood screening facilities. In the core lab business, the continued rollout of Abbott's Alinity testing platform and increased routine diagnostic testing are likely to have boosted revenues in the to-be-reported quarter. The company earlier expected to earn benefits in the contract renewal and competitive win rates, with several recent large account wins likely to increasingly contribute to growth in the second half of 2024. This might be reflected in the third-quarter results.
Meanwhile, the demand for COVID-19 testing nosedived in the past several quarters and marred the segment’s growth. We expect to see another quarter of year-over-year decline in Diagnostics revenues this time. However, the magnitude of this decline may have reduced because, during the third quarter of 2023, Diagnostic revenues were already soft and on a downward trend (in May 2023, WHO declared an end to COVID-19 as a public health emergency).
Going by the Zacks Consensus Estimate, Diagnostics revenues are likely to have decreased 4.3% year over year in the third quarter of 2024.
Medical Devices
The segment has been a standout performer for the company, steadily growing over the last several quarters and making a notable impact on the margin performance. In the third quarter of 2024, the business’ sales are likely to have been driven by the diabetes care division. This is expected to have been driven by the Freestyle Libre sensing technology, which alone surged 20% in the second quarter. We assume Abbott to have capitalized on Libre’s substantial growth opportunities to maintain its strong sales momentum. In addition, the newly launched Lingo and Libre Rio over-the-counter CGM systems are also expected to have positively boosted the company’s third-quarter revenues.
The electrophysiology portfolio is likely to have delivered robust performance across key regions and product categories, particularly in the ablation catheters and cardiac mapping areas.
Within Structural Heart, we expect the company to report robust performance, led by several recent launches that are driving new adoption and share capture, including TAVR, LAA, and tricuspid repair. The recently launched tricuspid repair device, TriClip, in the United States is expected to have contributed to the business’s third-quarter sales.
Within the Rhythm Management arm, Abbott’s new leadless pacemaker, AVEIR, is making strides in dual chamber pacing, following its rapid success in the single chamber pacing segment. Furthermore, the growth in the Neuromodulation division may have been led by the sales of Eterna, a rechargeable neurostimulation device for pain management. All these developments are anticipated to have greatly boosted Abbott’s top line in the quarter under review.
In Neuromodulation, growth is expected to have been driven by strong demand in international markets for the Eterna rechargeable spinal cord stimulation device, which obtained the CE mark in Europe last year.
According to the Zacks Consensus Estimate, the Medical device segment’s revenues are expected to improve 10.6% year over year in the third quarter.
Nutrition
In this division, sales of pediatric nutrition are likely to have been robust as Abbott continued to capture market share in the infant formula business. We also anticipate solid growth across the international portfolio of infant formula, toddler, and adult nutrition brands in the third quarter of 2024.
Furthermore, Abbott’s new nutrition shake Protality may have positively impacted the Nutrition revenues. The product was launched earlier this year and features a formulation similar to the company’s popular Ensure Max Protein drink. The leading Ensure family of products is also likely to have significantly favored top-line growth in the quarter under review.
The Zacks Consensus Estimate indicates a 4.7% improvement in the segment’s revenues in the second quarter compared to the same period in 2023.
What Our Model Suggests
Per our proven model, stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, have a higher chance of beating estimates. This is exactly the case here, as you can see below:
Earnings ESP: Abbott has an Earnings ESP of +0.18%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #2.
Other Stocks Worth a Look
Here are some medical stocks worth considering, as these also have the right combination of elements to post an earnings beat this time:
ACADIA Pharmaceuticals ACAD has an Earnings ESP of +0.92% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
ACAD’s earnings surpassed estimates in three of the trailing four quarters and missed once, with the average surprise being 42.37%. The Zacks Consensus Estimate for the company’s third-quarter EPS implies a surge of 127.5% from the year-ago quarter reported figure. The company is expected to release third-quarter 2024 results soon.
RadNet RDNT has an Earnings ESP of +20.00% and a Zacks Rank #2. The company is expected to release third-quarter 2024 results soon.
RDNT’s earnings surpassed estimates in three of the trailing four quarters and matched the same once, with the average surprise being 98.23%. The Zacks Consensus Estimate for RadNet’s third-quarter EPS indicates an increase of 21.4% from the year-ago quarter reported figure.
Masimo MASI has an Earnings ESP of +0.40% and a Zacks Rank #2. The company is likely to release third-quarter 2024 results soon.
The company’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 14.63%. The Zacks Consensus Estimate for MASI’s 2024 third-quarter EPS implies an increase of 33.3% from the year-ago reported figure.
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