Second-quarter worldwide sales came in at $7.77 billion, up 17% year over year on a reported basis. The top line edged past the Zacks Consensus Estimate of $7.73 billion.
On an organic basis (adjusting for the impact of foreign exchange as well as certain acquisitions and divestments) sales increased 8% year over year in the reported quarter.
Abbott operates through four segments, namely Established Pharmaceuticals Division (EPD), Medical Devices, Nutrition and Diagnostics.
EPD sales rose 10.5% on a reported basis (up 12.3% on an organic basis) to $1.13 billion. This included a 1.8% adverse impact of from currency fluctuations. Sales in the key emerging markets increased 8.4% (up 12%), driven by double-digit growth across several geographies, including India and China.
Abbott Laboratories Price, Consensus and EPS Surprise | Abbott Laboratories Quote
The Medical Devices business sales increased 11.3% on a reported basis to $2.89 billion. On an organic basis, sales grew 8.2%.
Cardiovascular and Neuromodulation sales reportedly (up 4.4% on an organic basis) rose 7.1% on double-digit growth in Electrophysiology and Neuromodulation.
Vascular product sales, however, declined 3.8% on a reported basis (down 0.3%). Within Rhythm Management, the company saw a sales decrease of 1.5% on a reported basis (a decline of 4%).
Diabetes Care sales improved 39.8% (up 33.6%), buoyed consistent consumer uptake of FreeStyle Libre, the revolutionary continuous glucose monitoring system of Abbott.
Nutrition sales were up 7.3% year over year on a reported basis (up 6.4% on an organic basis). Foreign exchange drove sales by 0.9%. Pediatric Nutrition sales increased 5.3% on an organic basis. Adult Nutrition sales were up 7.8% organically.
Diagnostics sales soared 47.2% year over year on a reported basis (up 6.6% on a comparable operational basis). Core Laboratory grew and Point of Care Diagnostics sales grew 7.7% and 6%, respectively, on an organic basis. Molecular Diagnostics sales were up 6% as strong growth in the infectious disease testing business was partially offset by the planned scale down in other testing areas, primarily in the United States. Rapid Diagnostics recorded sales of $484 million, driven by solid contributions from infectious disease testing and cardiometabolic testing.
Abbott has raised its 2018 adjusted earnings per share guidance. Adjusting for certain net specified items for the full year, adjusted earnings from continuing operations are now expected in the band of $2.85-$2.91 as compared to the earlier-projected range of $2.80-$2.90. The Zacks Consensus Estimate of $2.86 remains within but near to the lower end of this projected range.
The company has also provided third-quarter 2018 adjusted earnings per share outlook. It expects to report adjusted earnings from continuing operations in the range of 73-75 cents. The consensus mark of 75 cents coincides with the upper end of the predicted range.
Abbott has steered past the Zacks Consensus Estimate for both earnings and revenues. We are optimistic about the company’s strong and consistent EPD and Medical Devices performance.Particularly, Abbott has been riding high on a healthy growth within its Diabetes Care business. The company has been hogging the limelight for developments in the flagship, sensor-based continuous glucose monitoring (CGM) system — FreeStyle Libre System. Also, solid contributions from the company’s other two businesses encourage us.
The company continues to benefit from a strong integration synergy of St. Jude Medical, which offers it an industry-leading pipeline across cardiovascular, neuromodulation, diabetes and vision care. We are also impressed by Abbott’s Alere integration. Synergies from this consolidation in the form of revenues from Rapid Diagnostics have been driving the company’s growth.
Meanwhile, the company’s emerging market performance has been extremely promising on several strategic developments.
A few other top-ranked stocks in the broader medical space are Genomic Health GHDX, Align Technology, Inc. ALGN and Integer Holdings Corp. ITGR.
Align Technology is expected to release second-quarter 2018 results on Jul 25. The Zacks Consensus Estimate for the period’s adjusted EPS is $1.09 and for revenues, $469.2 million. The stock carries a Zacks Rank #1.
Integer Holdings is slated to release second-quarter 2018 results on Apr 25. The Zacks Consensus Estimate for adjusted bottom line in the to-be-reported quarter is 90 cents and for the top line, $381.8 million. The stock carries a Zacks Rank #1.