Earnings on Tap: Abbott Laboratories
Despite notable progress in bringing down costs, the pharmaceuticals company still has plenty of room to increase profitability.
Despite notable progress in bringing down costs, the pharmaceuticals company still has plenty of room to increase profitability.
Global pharmaceuticals and health-care products company Abbott Laboratories (ABT) is slated to report its latest results before markets open Wednesday.
Earnings are expected to come in at $0.44 per share per Wall Street estimates, compared with $1.08 per diluted share reported in the year-ago period.
In the previous quarter, the company reported a profit of $544 million or $0.34 per share, down from $1.24 billion a year ago. But net sales climbed 1.8% to almost $5.4 billion, logging a gain of 3.5% from the same period a year ago excluding currency impacts.
Commenting on the first-quarter results, Morningstar analyst Debbie Wang noted that, similar to past quarters, there was strength in several key areas related to Abbott's narrow moat, which includes its presence and infrastructure in emerging markets.
Abbott's investments in building out its emerging-markets infrastructure should give the firm a head start in penetrating those geographies, opines Wang, who also thinks the company's aggressive cost-cutting plans should propel bottom-line growth much quicker than top-line growth.
But despite Abbott's progress in bringing down costs, the gap between its operating margin and those of its competitors remains substantial, observes Wang. She feels that there is plenty of room for further improvement on the profitability front for Abbott.
Shares of Abbott have gained more than 13% since the start of the year and are presently trading near Morningstar's fair value estimate.
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