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ABT Stock: Can We Expect a Bullish Trend after 2Q17 Earnings?

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ABT Stock: Can We Expect a Bullish Trend after 2Q17 Earnings? PART 3 OF 4

What to Expect from Abbott Laboratories’ 2Q17 Earnings

Analyst estimates

Abbott Laboratories (ABT) accounts for ~2.4% of the Health Care Select Sector SPDR Fund (XLV). The company is scheduled to release its 2Q17 earnings results on July 20, 2017. For the last several quarters, Abbott Laboratories has registered results exceeding analysts’ earnings estimates for the last several quarters. In 1Q17, Abbott Laboratories’ earnings exceeded analysts’ estimates by approximately 11.6%. ABT stock rose about 0.37% following the earnings announcement on April 19, 2017.

Let’s look at the Wall Street expectations for the company’s 2Q17 earnings results.

What to Expect from Abbott Laboratories’ 2Q17 Earnings

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According to analyst estimates, Abbott Laboratories’ 2Q17 EPS (earnings per share) are expected at ~$0.60. Abbott expects to register adjusted EPS of $0.59–$0.61. Abbott’s acquisition of St. Jude Medical, which it completed in 1Q17, is also likely to contribute to earnings in 2Q17.

Profit margin estimates

For 1Q17, Wall Street analysts project that the gross profit margin for Abbott Laboratories will rise to ~$4 billion. The estimate represents ~59.8% of its total revenue, which is higher than the company’s 59.2% gross margin in 1Q17.

Abbott’s research and development investment and SG&A (selling, general, and administrative) expenses are expected to be around 7.5% and 31.7% of total sales, respectively. Recent product launches and acquisitions are expected to positively impact the company’s earnings, whereas continued headwinds from China are expected to impact 2Q17 revenues. For more on acquisitions as a key growth driver, read Abbott’s Acquisitions Are Its Major Growth Drivers.

In their most recent quarters, Abbott’s major competitors Stryker (SYK), Becton Dickinson (BDX), and Medtronic (MDT) are expected to report year-over-year rises in EPS of 8.6%, 3.8%, and 4.8%, respectively.

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