What happened
Shares of the diversified healthcare company Abbott Laboratories (ABT +0.18%) are having a rough session today. Specifically, the company's stock was in the red by a noteworthy 7.72% on sky-high volume as of 1:07 p.m. ET Wednesday afternoon.
What's weighing on Abbott's stock today? Ahead of the opening bell, the healthcare giant released its 2022 third-quarter results. While the company's Q3 results were strong overall (more on this below), investors appear to be focused on future declines stemming from an anticipated drop-off in COVID-19 testing revenue.
So what
That said, Abbott's Q3 results were far from doom and gloom. Abbott handily beat Wall Street's consensus Q3 revenue estimate by nearly $800 million. What's more, the company's Q3 adjusted earnings per share of $1.15 topped analysts' average estimate by a whopping 22.3%. Abbott also raised its full-year 2022 earnings per share guidance during today's presentation. That being said, the company did not roll out an updated revenue forecast for the year.
NYSE: ABT
Key Data Points
What's all the fuss about? Management's Q3 commentary seems to imply that COVID-19 testing sales will drop by a staggering 70% in Q4 relative to Q3. Wall Street, for its part, was expecting the company's COVID-19 diagnostic sales to remain strong for the remainder of the year due to a potential surge in cases during the winter months.
Now what
Is Abbott's stock a buy on this weakness? I think this pullback is entirely unjustified. Abbott's management seems to be lowering expectations for its COVID-19 testing business out of an abundance of caution. Nonetheless, most experts believe that COVID-19 cases will surge worldwide for a third year in a row this winter. Abbott's COVID-19 diagnostics business, in turn, should generate stellar sales yet again in Q4.
