Q4 Earnings Preview for Abbott Laboratories (ABT)


Abbott Laboratories (NYSE:ABT) is scheduled to report Q4 earnings results on January 22, 2020. Management plans to host the earnings conference call on the same morning at 8:30 AM CST.

The company is expected to report earnings of $0.95/share on revenue of $8.267 billion. The consensus earnings per share (EPS) of $0.95/share is based on a poll of 18 analysts and represents a growth of 17.3% over the same quarter last year when the company reported earnings of $0.81/share.

The revenue forecast of $8.267 billion based on a poll of 15 analysts implies a year-over-year (YoY) growth of 6.5%. Last year the company reported $7.765 billion in revenue for the quarter.

Expected to report EPS growth of $0.14/share for Q4, 2019
Metric Expected Prior Year YoY Change
Revenue $8,267.00 $7,765.00 6.5%
EPS $0.95 $0.81 17.3%

Abbott has seen strong revenue growth recently driven by the robust performance of  FreeStyle Libre in the company’s Diabetes Care business. Last quarter, the Libre segment organically grew revenue by over 70% on a year-over-year basis. The company’s Xience stent business also remains strong due to the product’s track record of efficacy and safety. The company has managed to grow topline without compromising on gross margins:

NYSE:ABT Fundamentals Chart

Source: Finbox

Earnings Call Trends

Historically, management has exceeded analyst expectations 6 out of the last 8 tracked quarters and met expectations 2 quarters.

What are your expectations from Abbott Laboratories for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q3, 2019 $0.84 $0.84 0.0% Meet
Q2, 2019 $0.80 $0.82 2.5% Beat
Q1, 2019 $0.61 $0.63 3.3% Beat
Q4, 2018 $0.81 $0.81 0.0% Meet
Q3, 2018 $0.74 $0.75 1.4% Beat
Q2, 2018 $0.71 $0.73 2.8% Beat
Q1, 2018 $0.58 $0.59 1.7% Beat
Q4, 2017 $0.73 $0.74 1.4% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report.

After the last earnings report for the period ending September 30, 2019, the stock price did not react much to the update.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
2019-10-16 $81.98 $82.38 0.5% Increase
2019-07-17 $83.16 $87.76 5.5% Increase
2019-04-17 $76.38 $73.92 -3.2% Decline
2019-01-23 $71.49 $70.86 -0.9% Decline

Fundamentals And Technical Analysis

Abbott Laboratories is currently trading at $89/share, up 0.8% for the day. Abbott is trading at approximately 99.7% of its 52-week high of $89.24/share. The company’s stock price is up 8.0% since the last earnings report and up 4.6% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 68.10 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.

NYSE:ABT Stock Price Chart Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 47.8x and a forward P/E multiple of 27.2x.

Abbott Laboratories’ current share price also implies a price-to-book (P/B) multiple of 4.9x. The following table summarizes some other key fundamental ratios:

Data as of January 20, 2020
Metric Value
Last Fiscal Period FY2019.Q3
Period End Date September 30, 2019
Stock Price (Current) $89
P/E Ratio 47.8x
P/E Ratio (Fwd) 27.2x
PEG Ratio 2.5
Total Debt to Capital (%) 11.3%
Levered Free Cash Flow $3.814 billion
Enterprise Value / EBITDA 22.4x

Source: Finbox

Company Profile: Abbott Laboratories

Abbott Laboratories is a large-cap stock with a market capitalization of $157.4 billion and a total enterprise value of $173.3 billion. The company operates in the Healthcare sector and the Healthcare Equipment & Supplies industry.

Abbott discovers, develops, manufactures, and sells health care products worldwide. The company’s Established Pharmaceutical Products segment offers branded generic pharmaceuticals for the treatment of pancreatic exocrine insufficiency; irritable bowel syndrome or biliary spasm; intrahepatic cholestasis or depressive symptom; gynecological disorder; hormone replacement therapy; dyslipidemia; hypertension; hypothyroidism; Ménière’s disease and vestibular vertigo; pain, fever, and inflammation; migraine; and anti-infective clarithromycin, as well as provides influenza vaccines and products that regulate physiological rhythm of the colon.

Its Diagnostic Products segment offers core laboratory systems in the areas of immunoassay, clinical chemistry, hematology, and transfusion; molecular diagnostics systems that automates the extraction, purification, and preparation of DNA and RNA from patient samples, as well as detects and measures infectious agents; cartridges for blood analysis; rapid diagnostics systems for infectious diseases; molecular point-of-care care testing for HIV, influenza A and B, RSV, and Strep A; cardiometabolic test systems; drug and alcohol test systems, as well as remote patient monitoring and consumer self-test systems; and informatics and automation solutions for use in laboratories. The company’s Nutritional Products segment provides pediatric and adult nutritional products.

Its Cardiovascular and Neuromodulation Products segment offers rhythm management, electrophysiology, heart failure, vascular, and structural heart devices for the treatment of cardiovascular diseases, as well as neuromodulation devices for the management of chronic pain and movement disorders. The company also provides glucose and blood glucose monitoring systems, including test strips, sensors, data management decision software, and accessories for people with diabetes.

The company was founded in 1888 and is headquartered in Abbott Park, Illinois.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

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