- By Alberto Abaterusso
Today, Abbott Laboratories (ABT) released its third quarter results. The U.S.-based international health care company reported a revenue of $5.3 billion (+2.9% year-over-year), beating analysts' expectations by $10 million and reported adjusted diluted earnings-per-share from continuing operations of 59 cents (+9.3% year-over-year), beating analysts' expectations by one cent.
The intrinsic value of ABT
During the third quarter, the increase in sales was driven by Medical Devices with $1,310 million (+6.4% year-over-year), Establilshed Pharmaceuticals with $1,012 million (+5.3% year-over-year) and Diagnostics with $1,213 million (+5.0% year-over-year), offset by a 2.0% (year-over-year) decline in the Nutrition segment that accounted for $1,755 million in sales.
Worldwide Nutrition sales decreased on a reported (2.0%) and operational (1.0%) basis, mainly due to challenging Chinese market conditions faced by Abbott's Worldwide Pediatric Nutrition segment.
Third quarter strong pediatric nutrition sub-segment performance in Latin America and Southeast Asia, plus operational sales growth led by growth of Ensure, could only partially offset the worldwide Nutrition segment's sales decline.
Worldwide Diagnostics sales increased on a reported 5.0% (year-over-year) and operational 5.4% ( year-over-year ) basis. The increase was driven by U.S. and international continued share gains in the Core Laboratory Diagnostics and by continued adoption of Abbott's i-STAT handheld system (point of Care Diagnostics sub-segment) in the U.S. and international markets.
Continued strong growth in India - one of the key emerging markets for Abbott's branded generics product portfolio long-term growth opportunities - and above-market growth in several South American countries drove third quarter Established Pharmaceuticals sales, increasing both on a reported 5.3% ( year-over-year ) and on an operational 9.0% ( year-over-year ) basis.
In the third quarter, Worldwide Medical Devices sales increased 6.4% ( year-over-year ) on a reported basis and increased 6.0% ( year-over-year ) on an operational basis. The increase was driven by double-digit growth of MitraClip (Worldwide sales of Vascular products), Abbott's device for the treatment of mitral regurgitation; strong sales of vessel closure products and Supera (endovascular business), Abbott's unique stent to relieve leg's blood vessels; continued increase in the diffusion level of FreeStyle Libre (Worldwide Diabetes Care sub-segment) - Abbott's revolutionary continuous glucose monitoring system that eliminates the need for finger-sticks - and cataract products in the premium intraocular lens segment (Worldwide Medical Optics sub-segment).
"Abbott adjusted its full-year 2016 EPS guidance for continuing operations under GAAP to 59 cents to 61 cents, and narrowed and raised at the mid-point its full-year 2016 adjusted EPS for continuing operations to $2.19 to $2.21, exceeding its initial guidance for the year." (ABT's PR).
Abbott declared the 371st consecutive quarterly dividend of 26 cents per share on Sept. 15. The current dividend yield is 2.60%. The company is long-term dividend payer and has increased its dividend payout for 44 consecutive years.
Abbott is a member of the S&P 500 Dividend Aristocrats Index.
At the moment, Abbott is trading around $40.07 per share on the New York Stock Exchange and underperformed with 15.75% the Standard & Poor's 500 year to date.
Disclosure: I have no positions in Abbott Laboratories.
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The intrinsic value of ABT