Dallas, Texas 04/22/2014 (FINANCIALSTRENDS) – Abbott Laboratories (NYSE:ABT) is holding steady on its course in the wake of a quarterly and yearly earnings report which has both positive news and the despondent kind in equal doses. The result is literally and figuratively a “hold” rating for ABT from Wall St.
The Earnings Report
Abbott reported first-quarter earnings of $375 million, which works out to an ongoing diluted EPS of $0.41, well above the previous guidance range of $0.34 to $0.36. It also beats analyst consensus estimates of $0.36 per share. Diluted EPS under GAAP was reported to be $0.22.
However, the year-on-year quarterly revenue dropped by 2.6% from $5.38 billion to $5.24 billion, crashing down past the analyst consensus estimate of $5.29 billion.
Abbott confirmed full-year 2014 ongoing EPS guidance of $2.16 to $2.26, which puts the company’s growth in double digits even at the middle of the guidance range. Projected full-year EPS under GAAP was set at $1.13 to $1.23.
Miles D. White, chairman and chief executive officer, Abbott, said that, “We are off to a good start, and we continue to expect accelerating performance beginning in the second quarter as we target another year of double-digit ongoing earnings-per-share growth.”
The Hold Rating
The problem for analysts who can’t get past a hold rating for ABT is that Abbott is not performing as per its own high historical record, even though the company continues to outperform competitors. It looks good for ABT investors in the short term, but it’s hard to say at what point Abbott stops being better than the rest.
Even though revenue didn’t beat analyst expectations, their revenue growth is still higher than the industry’s average 2.7% growth rate. Their gross profit margin is very high, but it’s still less than what it was last year, and the net profit margin is lower than the industry average.