What To Expect From Abbott In Q1?

Abbott Labs (NYSE:ABT) is expected to publish its Q1 2019 results on April 17. This note details Trefis’ forecasts for Abbott, as well as some of the key trends we will be watching when the company reports earnings.

How have Abbott’s revenues changed over recent quarters, and what’s the forecast for Q1 2019?

• Total Revenues for Abbott have largely trended higher over recent quarters.
• Revenues grew from $7.6 billion in Q4 2017 to $7.8 billion in Q4 2018.
• The growth can primarily be attributed to higher sales of its medical devices.
• We estimate Abbott’s revenues to be $7.8 billion for Q1; a figure 6% higher than what it reported a year ago.

Which are the key revenue drivers to watch out for in Abbott’s Q1 results?

• Medical Devices and Diagnostics segments will be the key growth driver for Abbott in the near term.

What to expect from the Medical Devices segment?

• Abbott’s Medical Devices segment primarily includes products for vascular and diabetes.
• The segment revenues have grown from $2.7 billion in Q4 2017 to $2.9 billion in Q4 2018.
• We forecast the revenues to be a little under $3 billion in Q1 2019, reflecting high single-digit growth (y-o-y).
• Medical devices segment has seen steady growth in the recent past, led by higher electrophysiology, structural heart, and Freestyle Libre sales.
• This trend will likely continue in Q1 as well.
• Electrophysiology growth will likely be led by Confirm RxTM Insertable Cardiac Monitor (ICM), while structural heart should continue to benefit from Amplatzer (TM) Occluder and higher sales of MitraClip.
• MitraClip was recently approved by the U.S. FDA for the treatment of heart failure in patients with clinically significant secondary mitral regurgitation.
• This should further aid the segment sales.

What to expect from the Diagnostics business?

• Abbott’s Diagnostics business includes sales of diagnostic equipment used in diagnosis of diseases, conditions, or infections.
• The segment revenues have grown from $1.9 billion in Q4 2017 to a little under $2 billion in Q4 2018.
• We forecast the sales to remain a little under $2 billion, reflecting high single-digit growth from the prior year quarter.
• Abbott’s newly launched Alinity systems will likely aid the segment sales growth. 
• With Alere acquisition in Q4 2017, Abbott has added the tests for heart attacks, influenza, and drug abuse to its suite of diagnostic products.
• This will further boost its sales.

What will be the impact of the above on Abbott’s EPS?

• We expect the earnings to be $0.76 per share on an adjusted basis in Q1. This reflects 28% growth to the prior year quarter.
• The growth in earnings will likely be led by higher revenues, and higher margins.
• The company has seen slight improvement in its margins over the recent quarters, and this trend should continue in Q1 as well.

You can view our interactive dashboard analysis ~ How Is Abbott Likely To Have Fared In Q1? for more details on the key drivers of the company’s expected Q1 performance. In addition, you can see more of our data for Healthcare companies here.

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