Abbott Laboratories (ABT) Tops EPS Estimate But Revenue Miss

Abbott Laboratories (ABT) Tops EPS Estimate But Revenue Miss
By Abbott LaboratoriesUploaded by Gump Stump at en.wikipedia [Public domain], via Wikimedia Commons

Abbott Laboratories (NYSE:ABT) released its earnings report for the second quarter of 2013 this morning, July 16, before the market opened. The firm’s report showed that it earned $46 cents per share in the three month period, and took in $5.45 billion in revenue. Abbott stock will open at $35.70 later today.

Abbott Laboratories (ABT) Tops EPS Estimate But Revenue Miss

Analysts studying Abbott Laboratories (NYSE:ABT) were looking for earnings of 44 cents per share from the company in this earnings report. Analysts thought that the company would manage to show revenue of $5.52 billion. The earnings are nothing on the company’s performance in 2012 as the company shed its propriety drug business at the end of last year.

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In the same three months of 2012 Abbott earned $1.23 per share on revenue of $9.8 billion.

Acquisition time

Abbott Laboratories (NYSE:ABT) announced yesterday that it had agreed on a price to buy two medical device companies, IDEV Technologies and OptiMedica. the company agreed to pay $310 million and $400 million, based on performance, for the companies respectively.

The company is set to host a conference call to discuss this earnings report at 9 am EST. Its recent acquisitions are sure to feature in the course of the call. Investors and analysts alike are interested to hear the company’s plans for its growing medical device portfolio. The company appears to be positioning itself to be a major player in the area in the years ahead.

Abbott Poor Performance

Since Abbott Laboratories (NYSE:ABT) lost its drug business investors seem nervous about the stock.  Since the start of the new year the company has seen its shares gain just 9%. Investors should feel pretty good that that number signals poor performance in 2013. Rivals have been performing at a much higher level in general, and the S&P 500 has gained more than 17% in the same time period.

The company is trading at a very high multiple for the industry it’s in; however. The firm is trading at a P/E of 73, even taking into account the loss of its drug business. That number implies that investors see huge growth in earnings in the coming years. If Abbott Laboratories (NYSE:ABT) doesn’t deliver coherently it could be a bad year for the firms share holders.

Abbott Laboratories (NYSE:ABT) is trying something new, and that always comes with risks. The firm needs to time to fit its recent acquisitions into its business, and work out a steady business plan in its new markets. Whether or not investors give the company the benefit of the doubt will be seen when the market opens.


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