ABT’s Q2 2018 EPS Beat Analysts’ Estimates and Company Guidance

Abbott’s Q2 2018 earnings results

On July 18, Abbott Laboratories reported its second-quarter adjusted diluted EPS of $0.73 during its earnings release. It exceeded its Wall Street estimate of $0.71 and the company’s guidance range of $0.70–$0.72.

The company’s adjusted EPS represented YoY (year-over-year) growth of ~17.7%. In the first quarter, Abbott Laboratories reported adjusted EPS of $0.59. The chart below shows the company’s adjusted EPS over the last few quarters versus analysts’ estimates.

ABT’s Q2 2018 EPS Beat Analysts’ Estimates and Company Guidance

Peers Boston Scientific (BSX) and Thermo Fisher Scientific (TMO) posted adjusted EPS growth of 28.0% and 19.6%, respectively, in their recently ended quarters.

What impacted the bottom line growth in the quarter?

In the second quarter, Abbott Laboratories’ solid bottom-line growth was driven by its top-line growth, synergies from recent acquisitions, continued focus on margin expansion, and earnings growth that exceeded its sales growth.

Abbott Laboratories’ gross margin in the second quarter was reported to be ~50.5% of its total sales, which was a YoY decline of ~1.1%. This was due to the doubling of its SG&A (selling, general, and administrative) expenses due to increased investments in new product launches and commercial initiatives.

Abbott Laboratories’ increased commitment to delivering organic growth has also spurred the company’s R&D (research and development) investments, which rose ~15.5% in the second quarter. Its operating expenses were also higher in the quarter.

Abbott Laboratories’ adjusted net income in the second quarter came in at $1.3 billion, which represented a YoY increase of ~18.2%. The operating profit in the quarter was reported to be $1.6 billion, or ~21.4% of the total sales.

Next, let’s discuss the second-quarter performance of Abbott Laboratories’ Diagnostics business.

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