Earnings on Tap: Abbott Laboratories
Abbott has ample opportunities to increase efficiency and raise profitability.
Abbott has ample opportunities to increase efficiency and raise profitability.
Drug giant Abbott Laboratories (ABT) will be reporting first-quarter numbers Wednesday morning ahead of the bell. Earnings this quarter are forecast to come in at $0.42 per share, down from $0.78 per diluted share a year ago. However, the company has had a record of beating Wall Street estimates; its results have topped analysts' expectations for the past four quarters.
Abbott reported a 34.9% drop in fourth-quarter earnings at $1.05 billion, or $0.66 per share, on account of higher costs even as sales increased 4.4% before the spin-off of AbbVie (ABBV).
Morningstar analyst Debbie Wang believes the new Abbott's near-term prospects are rooted in the firm's ability to increase efficiency and raise profitability. Aggressive cost-cutting plans should propel Abbott's bottom-line growth much quicker than top-line growth, adds Wang.
Abbott's shares have gained more than 15% since the start of the year, and are trading slightly above Morningstar's fair value estimate.
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