On Wednesday, October 17, 2012, Abbott Laboratories (NYSE:ABT) is expected to release its third quarter earnings.

Investors care about earnings because they drive stock prices. Strong earnings generally result in the stock price moving up and vice versa. SEE: How To Decode A Company's Earnings Reports

What to Expect: Analysts are expecting Abbott to report earnings of $1.28 per share, up 8.5% from a year ago, when the company reported earnings of $1.18 per share.

Though it hasn't changed in the last month, the consensus estimate is up from $1.27 three months ago. For the fiscal year, analysts are projecting earnings of $5.06 per share.

Revenue is expected to exceed last year's figure of $9.82 billion by 1% and come in at $9.91 billion for the quarter. The anticipated revenue for the fiscal year is $39.75 billion.

Company Performance: In the past four quarters, revenue has shown consistent growth. It increased 2% to $9.81 billion in the second quarter. Prior to that, the figure rose 4.6% in the first quarter, 4.1% in the fourth quarter of the last fiscal year and 13.2% in the third quarter of the last fiscal year.

ABT's P/E ratio of 22.8 is above the industry average of 14.53. Usually, if a stock has a high P/E ratio, it indicates that the market expects the company to grow earnings quickly in the future. A company's price/earnings ratio (P/E ratio) provides a measure of how expensive or cheap a stock is. A high P/E ratio indicates a stock that is expensive, while a low P/E ratio indicates a stock that is cheap. SEE: Can Investors Trust the P/E Ratio?

The stock price has increased from $65.48 on July 16, 2012 to $69.42 over the past quarter. Currently, Abbott's stock is on a downward trend. The share price has fallen $2.19 since October 5, 2012.

The Competition: Abbott Laboratories is a pharmaceuticals health care company, whose main line of business is in the discovery, development, manufacture, and sale of a broad range of health care products. Its customers include wholesalers, hospitals and commercial laboratories. The company's closest competitor in the biotechnology and drugs industry, Johnson & Johnson (JNJ), will report earnings on October 16, 2012. Analysts are expecting earnings of $1.21 per share for Johnson & Johnson, down 2.4% from last year's earnings of $1.24 per share. Analysts are less optimistic about Abbott than about Johnson & Johnson. Fourteen out of 22 analysts rate the latter a buy compared to six of 18 for the former.

Related Articles
  1. Stock Analysis

    Will WYNN Continue to Rally?

    Wynn Resorts has experienced a rally recently. Will it remain a good bet?
  2. Stock Analysis

    Don't Be Fooled by the Market's Recent Rally

    The bulls won for a bit in early October, but will bears have the last laugh?
  3. Stock Analysis

    Will Twitter's Stock Find its Wings Soon?

    Twitter is an enigma to many investors, but its story is pretty straightforward.
  4. Stock Analysis

    8 Solid Utility Stocks for a Bear Market

    If you're seeking modest appreciation, generous dividend payments and resiliency, consider these eight utility stocks.
  5. Stock Analysis

    Why Phillips 66 (PSX) is a Solid Long-Term Bet

    Here's why Phillips 66 will likely remain one of the world’s largest and most profitable companies for a long time to come.
  6. Stock Analysis

    3 Resilient Oil Stocks for a Down Market

    Stuck on oil? Take a look at these six stocks—three that present risk vs. three that offer some resiliency.
  7. Economics

    Keep an Eye on These Emerging Economies

    Emerging markets have been hammered lately, but these three countries (and their large and young populations) are worth monitoring.
  8. Stock Analysis

    Is Pepsi (PEP) Still a Safe Bet?

    PepsiCo has long been known as one of the most resilient stocks throughout the broader market. Is this still the case today?
  9. Investing

    The ABCs of Bond ETF Distributions

    How do bond exchange traded fund (ETF) distributions work? It’s a question I get a lot. First, let’s explain what we mean by distributions.
  10. Stock Analysis

    3 Stocks that Are Top Bets for Retirement

    These three stocks are resilient, fundamentally sound and also pay generous dividends.
  1. How do dividends affect retained earnings?

    When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
  2. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  3. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  4. How does additional paid in capital affect retained earnings?

    Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>
  5. What types of capital are not considered share capital?

    The money a business uses to fund operations or growth is called capital, and there are a number of capital sources available. ... Read Full Answer >>
  6. What is the difference between issued share capital and subscribed share capital?

    The difference between subscribed share capital and issued share capital is the former relates to the amount of stock for ... Read Full Answer >>

You May Also Like

Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!