Shares of Abbott Laboratories (ABT) fell Wednesday despite the company posting positive earnings and after the healthcare company raised its quarterly dividend.
The stock dropped 2.2% to close at $69.91 a share.
Fourth-quarter adjusted earnings per share were 81 cents, in line with Wall Street estimates. On a GAAP basis, Abbott earned 37 cents a share. Sales were $7.8 billion, just missing Wall Street's expected $7.81 billion. Both the Nutrition and Established Pharmaceuticals segments saw year-over-year revenue growth of 3.6% for the quarter. Medicals devices revenue, which accounts for roughly 38% of Abbott's total revenue, grew at 9%.
Abbott raised its quarterly dividend to 32 cents a share from 28 cents. The 32-cent dividend implies a roughly 0.5% yield.
The company said it expects adjusted EPS in 2019 of between $3.15 and $3.25. Analysts were expecting per-share-earnings of $3.20.
"2018 was another outstanding year for Abbott," said Miles D. White, chairman and chief executive officer, Abbott. "We exceeded the organic sales growth range we set at the beginning of the year, achieved a number of significant advances in our pipeline, and significantly improved our balance sheet and strategic flexibility. We're very well-positioned heading into 2019."
MUST WATCH: Jim Cramer's 10 Lessons for a Bear Market
Abbott shares have risen more than 20% in the past year. The stock was likely priced for perfection, according to Jeff Marks, TheStreet's Action Alerts Plus Senior Portfolio Analyst, as the shares rose 4.3% in the last five days leading into earnings. Still, there's upside, as Jim Cramer's Action Alerts Plus analysts reiterated their $80 price target on the stock last week, representing roughly 14% upside. "Abbott reported a solid fourth quarter result," Marks said. "Although there was some softness in Established Pharmaceuticals and Nutrition, I think the impressive 9.0% organic sales growth in Medical Devices sets the company up for a strong 2019."
See AAP's insight on Abbott here.
Analysts at CFRA increased their price target on the pharmaceutical conglomerate to $80 a share from $78, "reflecting an above-peer multiple of 24.8x our next-12-month EPS estimate of $3.23 because we continue to expect ABT's exposure to high-growth therapeutic areas to drive above-market organic sales and double-digit earnings growth," the analysts said.