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Abbott Witnesses Stability in Its International Pediatric Nutrition Sales in 4Q17

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ABT’s Nutrition segment: 4Q17 performance

In 4Q17, Abbott Laboratories (ABT) reported low-single-digit sales in its Nutrition segment, according to the company’s expectations. The comparable operational sales growth reported by Abbott’s Nutrition segment in 4Q17 came in at ~2%.

These results show a modest sequential improvement for the quarter, though the segment’s sales witnessed a decline in fiscal 2Q17 due to China headwinds.

International sales performance has seen an improvement in 4Q17. The headwinds from China have ceased, and market conditions have been improving. With the new food safety regulations in effect from January 1, 2018, Abbott appears to be prepared for the transition and expects to see a minimal impact of these changes on its performance.

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In the United States, both pediatric and adult nutrition sales registered balanced performances. While the pediatric sales were driven by continued momentum in the demand for Pediasure and Pedialyte, adult nutrition sales growth was boosted by the company’s market-leading brands Ensure and Glucerna.

For fiscal 1Q18 and fiscal 2018, Abbott Laboratories expects to witness low-single-digit sales growth in its Nutrition segment.

Market dynamics and opportunities

According to Abbott Laboratories, the global nutrition market is worth $30 billion. This attractive market opportunity, driven by favorable demographics and social and economic trends, is expected to yield higher growth going forward. Abbott Laboratories appears to be in a strong position in this market, with global reach and an attractive product portfolio.

The company has gained some market share in the adult nutrition market from some of the major competitors, including Mead Johnson Nutrition (MJN), Nestlé (NSRGY), and Johnson & Johnson (JNJ).

Investors interested in participating in the growth potential of Abbott Laboratories can consider investing in the Vanguard Dividend Appreciation ETF (VIG), which has ~2.6% of its total portfolio holdings in ABT.

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