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Abbott Laboratories (ABT - Free Report) is slated to report first-quarter 2023 results on Apr. 19 before the market opens.

In the last reported quarter, the company delivered an earnings surprise of 14.4%. Over the trailing four quarters, its earnings exceeded the Zacks Consensus Estimate on all the occasions, the average beat being 22.42%.

Let's see how things have shaped up prior to this announcement.
 

Factors at Play

Persistent healthcare staffing challenges and diminishing demand for COVID-testing products are expected to have affected Abbott’s first-quarter performance. The decline in U.S. infant formula sales due to manufacturing disruptions and stubborn inflationary pressure, record strengthening of the U.S. dollar, and supply chain issues in certain areas of business are expected to have weighed heavily on the company through the first quarter. The lockdown issues in limited geographies, including China (where the company has an extensive base), are expected to have impacted business during the first quarter.

On a positive note, within Established Pharmaceuticals Division (EPD), the company has been witnessing sequential improvement banking on the successful execution of its Branded Generic operating model. The first-quarter performance is likely to have been driven by growing customer demand for core therapeutic lines, including cardiometabolic, respiratory, and central nervous system/pain management.

In Diagnostics, we expect the company to report a year-over-year decline in COVID test sales due to lower demand for laboratory-based tests. Excluding COVID testing revenues, sales of routine diagnostic tests are expected to have improved on the continuous rollout of Alinity — Abbott’s suite of diagnostic instruments — and expanding menus across testing platforms of immunoassay, clinical chemistry, and molecular testing. In March 2023, the company received FDA approval for the Alinity i laboratory traumatic brain injury (TBI) blood test. This will be the first commercially available TBI blood test widely available to hospitals in the United States. We believe this development to have contributed to the company’s Q1 performance.

Abbott’s other consumer-facing businesses, which include diabetes care, have been catching up, backed by new product instructions. During the fourth quarter of 2022, ABT initiated the full launch of Libre 3 in the United States, which automatically delivers minute glucose readings with accuracy, courtesy of the world’s smallest and thinnest wearable sensor. This is likely to have contributed to first-quarter performance on strong consumer adoption.
 

Abbott Laboratories Price and EPS Surprise

Abbott Laboratories price-eps-surprise | Abbott Laboratories Quote

The recent U.S. regulatory approvals of Aveir — the highly-innovative leadless pacemaker used to treat people with slow heart rhythms — and Eterna — the smallest implantable rechargeable spinal cord stimulation system available in the market for chronic pain — are expected to have contributed to the first-quarter performance on the back on strong market adoption.

Within Nutrition, total worldwide Nutrition and Pediatric Nutrition sales are expected to have declined in the quarter to be reported, thanks to the voluntary recall and manufacturing shutdown of certain infant formula products manufactured at one of Abbott's U.S. plants since last February. These include the company’s market-leading Similac and Elecare.
 

Estimates

For first-quarter 2023, the Zacks Consensus Estimate for total revenues is pegged at $9.64 billion, indicating an 18.9% decline from the prior-year comparable quarter’s reported figure. The consensus mark for earnings is pegged at 98 cents, suggesting a 43.4% decline year on year.
 

Earnings Whispers

Per our proven model, a stock with the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) has a higher chance of beating estimates. That is not the case here, as you can see:

Earnings ESP: Abbott has an Earnings ESP of -1.92%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: It currently carries a Zacks Rank #3.

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