ABT’s Medical Devices Business: A Key Growth Driver



ABT’s 1Q18 revenues

On April 18, Abbott Laboratories (ABT) released its 1Q18 earnings results. The company registered revenues of $7.4 billion, which represents YoY (year-over-year) growth of ~16.7%. These sales results exceeded analysts’ estimates. 

On an organic basis, ABT’s revenues rose ~6.9% on a YoY basis, excluding the prior performance of the St. Jude’s Vascular Closure business and Abbott Medical Optics, which were divested in 1Q17. 

Abbott Laboratories’ sales growth in 1Q18 was primarily driven by the strong performance of its Medical Device business and improving dynamics in its Nutrition business. However, its Pharmaceuticals business registered disappointing results. 

Foreign exchange had a positive impact of ~4.2% on the company’s sales in 1Q18 due to the strengthened euro and other currencies in developed markets. The adjusted gross margin ratio for 1Q18 was reported to be ~59.3% of the company’s total sales.

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Earnings results for fiscal 1Q18

Abbott Laboratories’ (ABT) adjusted diluted EPS (earnings per share) in 1Q18 totaled $0.59, which was at the higher end of the company’s guidance. These results also came in ahead of analysts’ estimates. The adjusted EPS in 1Q18 registered YoY growth of ~23.0%.

On April 18, ABT stock registered a slight decline. This decrease was triggered by weak investor sentiment due to the lower-than-expected performance of Abbott’s EPD (Established Pharmaceuticals Division) business in 1Q18. The Vanguard S&P 500 ETF (VOO) rose ~0.97% that day. ABT stock makes up ~0.45% of VOO’s total portfolio.

Among Abbott Laboratories’ peers, Edwards Lifesciences (EW), Boston Scientific (BSX), and Baxter International (BAX) registered sales growth of 8.9%, 10.1%, and 8.2%, respectively, in their recently ended quarters.

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