Abbott Laboratories (ABT) reported a strong first-quarter performance. However, ABT stock decreased 3% after the organization declared profit guidance for the second quarter, which fell short of expectations.
Abbott Laboratories Quarterly Earnings Review
Abbott's sales of Libre, its wearable glucose monitor, increased by a notable 22% to $1.5 billion. Revenue from the structural heart division also increased modestly by 13%.
Regarding financials, Abbott reported a 2.2% increase in first-quarter sales to $9.96 billion, exceeding the consensus estimate of $9.88 billion. The organization disclosed substantial organic growth of 10.8% in total revenue, excluding COVID-19 test sales. According to a news release, the company has achieved double-digit organic growth for the fifth consecutive quarter.
Although adjusted earnings were reduced by almost 5% to 98 cents per share, they still surpassed analysts' expectations by three cents. The medical devices industry experienced the most robust growth, as evidenced by its 14.3% organic sales increase to $4.45 billion, which exceeded all expectations.
Conversely, Abbott's diagnostics division encountered persistent difficulties after its triumphs amid the COVID-19 pandemic. This segment experienced a 15.5% decline in organic sales to $2.21 billion. Except for the effects of COVID tests, sales increased more significantly by 5.4%, although they lagged behind other segments and failed to meet expectations.
Abbott Earnings Projection
According to a prominent analyst, the medical devices sector exceeded Wall Street's expectations in every respect. Electrophysiology sales experienced a noteworthy organic growth of approximately 19%, an improvement that ought to allay apprehensions regarding a decline in market share. Electrophysiology measures irregularities in the cardiac rhythm to identify them.
Despite these obstacles, Abbott revised its earnings guidance range for the entire fiscal year to $4.55 to $4.70 per share, with the midpoint surpassing prior projections. The anticipated earnings per share by analysts are $4.62. In addition, the organization anticipates an organic increase in annual sales ranging from 8.5% to 10%, exclusive of Covid tests.
Nevertheless, Abbott's guidance for the second quarter failed to meet expectations. The company anticipated earnings per share of $1.08 to $1.12, which was less than the Street's midpoint estimate of $1.12.
ABT Stock Forecast Technical Analysis
The daily chart shows massive selling pressure in the ABT stock price, which came with a solid high volume level formation above the current price. However, the recent price reached the 50% Fibonacci Retracement level at the 105.50 level. Therefore, as the current Abbott stock price reaches the discounted zone, any potential long opportunity is possible depending on the price action.
In the current context, the near-term support level is at the 102.28 level, which could be the first target of the current downside pressure. However, an extended bearish pressure with a bullish reversal from the 103.00 to 97.00 zone could be a probable long opportunity, targeting the 121.68 resistance level.
On the other hand, immediate buying pressure is possible, where a daily close above the 20-day EMA could be an alternative approach to join the bull run.
