What Are Abbott Laboratories’ Key Growth Drivers in 2019?

On its fourth-quarter earnings call, Abbott forecast that its Established Pharmaceuticals segment would grow in the mid- to high single digits YoY in the first quarter.

Margaret Patrick - Author
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Feb. 5 2019, Updated 10:30 a.m. ET

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High-growth businesses

On its fourth-quarter earnings conference call, Abbott Laboratories (ABT) forecast that its Established Pharmaceuticals segment would grow in the mid- to high single digits YoY (year-over-year) in the first quarter and in 2019. 

The company also projected mid- to high-single-digit YoY revenue growth for its Legacy Diagnostics segment and high-single-digit YoY revenue growth for its Medical Devices segment in the first quarter and in 2019.

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Growth trends

In 2018, Abbott’s Established Pharmaceuticals segment reported revenue of $4.42 billion, up 7% YoY on an organic basis and 3.2% YoY on a reported basis. According to Abbott Laboratories’ fourth-quarter earnings conference call, this performance was attributable to the double-digit revenue growth reported by the segment in emerging markets China and India. With the shift in demographics toward the older population, the increasing incidence of chronic diseases, and rising per-capita incomes, emerging markets present a long-term growth opportunity for medical device companies, including Abbott Laboratories, Boston Scientific (BSX), and Baxter International (BAX).

In 2018, the Medical Devices segment reported revenue of $11.37 billion, up 10.1% YoY on a reported basis and 9.1% YoY on an organic basis. According to Abbott Laboratories’ fourth-quarter earnings conference call, this performance was driven by robust sales in its electrophysiology, diabetes care, and structural heart businesses as well as the stabilization of sales in its vascular and rhythm management businesses.

In 2018, the Diagnostics segment reported revenue of $7.50 billion, up 33.5% YoY on a reported basis and 6.7% YoY on an organic basis. According to Abbott Laboratories’ fourth-quarter earnings conference call, this business has been consistently performing at above-market growth rates. In 2018, Abbott Laboratories launched Alinity instruments in many ex-US markets. The company expects to launch Alinity in the US market in late 2019.

Next, we’ll discuss Stryker’s key growth drivers in 2019.

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