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Assessing Abbott’s 3Q17 Expectations by Segment

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Aug. 18 2020, Updated 10:20 a.m. ET

Abbott’s business segments

Abbott Laboratories (ABT) is one of the biggest medical technology and services companies in the US and has four business segments: Nutrition, Diagnostic, Established Pharmaceuticals, and Medical Devices. The Medical Device segment is the largest business segment.

Notably, the Established Pharmaceutical segment has a presence in emerging markets and does not operate in developed countries.

ABT is also a leader in the adult nutrition space. Abbott has been gaining ground in the diagnostics space and increasing its market share gains through a number of collaborations, partnerships, and innovative product launches.

Abbott’s major competitors include Becton, Dickinson, and Company (BDX), Medtronic (MDT), and Thermo Fisher Scientific (TMO). Investors can consider investing in the iShares US Medical Devices ETF (IHI) for industry-focused exposure. ABT accounts for ~% of IHI’s total holdings.

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3Q17 outlook by business

In 3Q17, the Established Pharmaceuticals segment is expected to register high double-digit operational sales growth, but Nutrition sales growth is expected to be in the low single-digit. The Diagnostics segment is expected to report sales growth in the mid- to high-single digits.

In its Medical Devices segment, Abbott Laboratories expects to report double-digit sales growth in cardiovascular and neuromodulation. However, the rhythm management and vascular businesses are expected to report a weak performance, which will likely offset the growth of the Medical Devices segment, which is driven by high growth in electrophysiology, heart failure, structural heart, and neuromodulation.

The Diabetes segment continues to witness strong momentum, with double-digit sales growth forecasted for 3Q17.

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