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Abbott Laboratories’ 4Q15 Revenues Expected to Fall

Analysts Upbeat about Abbott Laboratories ahead of 4Q15 Report

(Continued from Prior Part)

Abbott’s revenue estimates

On January 28, 2016, Abbott Laboratories (ABT) will announce its 4Q15 earnings for the period ending December 31, 2015. Wall Street has estimated the company’s 4Q15 revenues to be about $5.3 billion, which would represent a decline of around 1.1% on a YoY (year-over-year) basis despite 1.4% YoY revenue growth in the last quarter. Abbott Laboratories’ revenue is expected to rise by 2.9% in 1Q16.

In 3Q15, Abbott Laboratories’ operational sales growth came in at 10.9%, but its reported sales growth was 1.4%, resulting from a negative foreign exchange impact of around 9.5%. Abbott Laboratories has forecast 4Q15 operational sales to grow in the mid-single digits with a negative foreign exchange impact of around 6.5% due to the strong US dollar.

The above diagram shows that analysts expect Abbott Laboratories to register 4Q15 revenues of $5.3 billion, representing a YoY decline of around 1.1%. The company has reported a 17.5% YoY increase in 4Q15 estimated net profit margins. The marginal decline in revenues was largely due to currency headwinds. Per analysts’ estimates, 1Q16 revenues are expected to grow further by 2.9% YoY.

The revenue growth will be driven by a strong product portfolio and double-digit growth of the company’s emerging markets business despite continued economic challenges in these markets. The nutrition segment is expected to be the major growth segment, with Diagnostics, Medical Devices, and Established Pharmaceuticals exhibiting a consistent performance.

Major competitors

Among Abbott Laboratories’ major competitors, Johnson & Johnson (JNJ) is expected to register a YoY revenue decline of approximately 2.1%, whereas Boston Scientific (BSX) and Stryker (SYK) are expected to see revenue growth of 5.8% and 3.6%, respectively.

Investors seeking diversified exposure to Abbott Laboratories can consider investing in the Health Care Select Sector SPDR Fund (XLV). Abbott Laboratories accounts for around 2.1% of the total holdings of XLV.

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