Despite a pre-market bounce after Abbott Laboratories(ABT) - Get Report reported strong first quarter earnings Wednesday, shares of the medical device, nutritional products and pharmaceutical maker dropped as trading began due to concerns about the pace of integrating recent mergers, a warning letter from regulators' about quality control at a California manufacturing plant and slow growth in the Chinese market for pediatric nutrition products.
Abbott shares rose a modest 0.37% Wednesday to $43.59, up 16 cents.
Per share earnings from continuing operations during the quarter were 48 cents, which beat the previous guidance of range of 42 to 44 cents cents per share. Sales grew 29.7% in a year marked by acquisitions and new products, while comparable operations sales grew 3.2%.
Abbott shares had fallen overnight, dropping $2.72 from Tuesday's close of $43.43. However, after the numbers were posted Wednesday morning the shares bounced up to $44.50 in premarket trading.
Abbott's guidance for all of 2017 remains unchanged and the medical device and pharmaceutical maker continues to project earnings per share from continuing operations under of $0.92 to $1.02, including amortization and integration expenses related to the acquisition of St. Jude Medical. Projected adjusted diluted earnings per share from continuing operations remains unchanged at $2.40 to $2.50 for the full year 2017.
In a note Tuesday Leerink analyst Danielle Antalffy said the firm has a $48 price target on the shares but remains cautious due to concern about the company's ability to hit syngergy targets for its just-completed acquisition of St. Jude Medical as well as the pending acquisition of Alere (ALR) , which just restructured terms of its acquisition by Abbott after a long dispute.
Antalffy said the major risks to Abbott's valuation include the possibility that the Alere acquisition fails to close, the potential for slower growth and increasing competition for major products, including Abbott's Xience drug-eluting stent, any product recalls or manufacturing warning letters that could lead to costly remediation costs or hinder sales.