Abbott Laboratories ABT reported third-quarter 2024 adjusted earnings per share (EPS) of $1.21, which beat the Zacks Consensus Estimate by 0.8%. The figure also improved 6.1% from the prior-year quarter’s level.

GAAP EPS came in at 94 cents, up 14.6% year over year.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Following the earnings announcement, ABT stock edged up 0.03% during the pre-market trading today.

ABT’s Q3 Revenues

Worldwide sales of $10.64 billion were up 4.9% year over year on a reported basis. The top line beat the Zacks Consensus Estimate by 0.7%.

Organically, sales improved 7.6% year over year. On an organic basis (excluding the impact of COVID-19 testing sales), sales rose 8.2% year over year.

ABT’s Q3 Results in Detail

Abbott operates through four segments — Established Pharmaceuticals, Medical Devices, Nutrition and Diagnostics.

In the third quarter, Established Pharmaceuticals’ product sales increased 2.7% on a reported basis (7% on an organic basis) to $1.41 billion.

Organic sales in key emerging markets improved 5.4% year over year. This was led by growth in several geographies and therapeutic areas, including gastroenterology, cardiometabolic, and central nervous system/pain management.

The Medical Devices segment’s sales rose 11.7% year over year on a reported basis (13.3% on an organic basis) to $4.75 billion.

Sales growth was led by double-digit growth in Diabetes Care, Structural Heart, Heart Failure and Electrophysiology. Several products, including FreeStyle Libre, Navitor, TriClip, Amplatzer Amulet and AVEIR, contributed to the strong performance.

The Diabetes Care division reported organic sales growth of 19.1% year over year, led by sales of continuous glucose monitors, which exceeded $1.6 billion. Structural Heart sales rose 16.5%. Heart Failure sales improved 14.4% year over year organically.

The Vascular division recorded organic sales growth of 4.9%. The Electrophysiology, Rhythm Management and Neuromodulation divisions recorded organic growth of 14.3%, 7% and 5.2%, respectively, in the quarter under review.

Nutrition sales were down 0.3% year over year on a reported basis (up 3.4% on an organic basis) to $2.07 billion.

Pediatric Nutrition sales were down 2.7% on an organic basis. Adult Nutrition sales improved 9.1% organically. Per the company, Adult Nutrition sales benefited from the strong global growth of Ensure, Abbott's market-leading complete and balanced nutrition brand.

Diagnostics sales were down 1.5% year over year on a reported basis (up 1.4% on an organic basis) to $2.41 billion.

Core Laboratory Diagnostics sales were up 4.3% organically. Molecular Diagnostics’ sales declined 2.1% on an organic basis. On an organic basis, Rapid Diagnostics sales were down 3%, whereas Point of Care Diagnostics sales rose 4.6%.

Margin Details of ABT

In the third quarter, the gross profit rose 7.2% year over year to $5.93 billion despite a 2.1% increase in the cost of products sold (excluding amortization expense). The gross margin expanded 123 basis points (bps) to 55.8%.

Abbott Laboratories Price, Consensus and EPS Surprise

Abbott Laboratories price-consensus-eps-surprise-chart | Abbott Laboratories Quote

Selling, general and administration expenses rose 6.3% year over year to $2.89 billion. Research and development expenses fell 6.1% year over year to $713 million. The company reported an adjusted operating profit of $2.33 billion, up 8.7% year over year. Also, the adjusted operating margin expanded 77 bps to 21.9%.

2024 Guidance

Abbott provided an updated guidance for 2024.

The full-year adjusted earnings (excluding specified items of $1.30 per share) are now expected to be in the range of $4.64-$4.74 (previously $4.61-$4.71) per share. The Zacks Consensus Estimate is pegged at $4.66.

Full-year 2024 organic sales growth, excluding COVID-19 testing-related sales, is expected to be in the range of 9.5-10% (earlier 8.5-10%). The Zacks Consensus Estimate for sales is currently pegged at $41.77 billion, suggesting a 4.1% improvement from the 2023 level.

The fourth-quarter 2024 adjusted EPS is projected to be in the band of $1.31-$1.37. The Zacks Consensus Estimate is pegged at $1.20.

Our Take

Abbott exited the third quarter of 2024 with better-than-expected results, with both its earnings and revenues beating their respective estimates. The company achieved another quarter of impressive growth in the underlying base business. Furthermore, the expansion of both margins during the quarter is highly commendable. The upbeat guidance for the full year instills optimism.

Throughout the third quarter of 2024, Abbott made a few significant partnerships. These included a unique global partnership with Medtronic to collaborate on connecting Abbott's world-leading continuous glucose monitoring (CGM) system with Medtronic's insulin delivery devices.

Also, Abbott entered into a partnership with the Big Ten Conferenceto conduct a nationwide blood donation competition to help increase the U.S. blood supply. Notable developments in the third quarter include the launch of Lingo — the first continuous glucose monitoring system available without a prescription in the United States — and the completion of enrollment (ahead of schedule) in its VOLT-AF IDE trial.

Meanwhile, Abbott’s Diagnostics sales growth continued to be adversely impacted by year-over-year declines in COVID-19 testing-related sales.

ABT’s Zacks Rank and Other Key Picks

Abbott currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks from the broader medical space are Addus HomeCare ADUS, Atea Pharmaceuticals AVIR and AdaptHealth Corp. AHCO.

Addus HomeCare sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here

The company reported a second-quarter adjusted EPS of $1.35, which surpassed the Zacks Consensus Estimate by 12.5%. Revenues of $286.9 million exceeded the Zacks Consensus Estimate by 1.1%. ADUS beat on earnings in each of the trailing four quarters, the average surprise being 11.45%.

Atea Pharmaceuticals, carrying a Zacks Rank #1 at present, reported a second-quarter 2024 loss of 48 cents per share. The loss per share estimate for the same was 78 cents. The company has an average earnings surprise of 5.23%.

AdaptHealth, carrying a Zacks Rank #2 at present, reported second-quarter 2024 EPS of $2.11, which surpassed the Zacks Consensus Estimate by 10.5%. Revenues of $806 million topped the consensus estimate by 0.4%. The company’s earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 40.97%.

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