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Author: MrTompkins Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 1692  
Subject: Earnings Check? Date: 2/22/2012 1:15 PM
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With recent comments I was curious if anyone has normalized the earnings profile. The 2012 estimates are excluding a lot of items most likely similar to the 2011 earnings. So if I was to normalize a growth rate over the past 10 years I could have a significant lower value?

If I take 2000 Diluted EPS of $1.78 to Diluted EPS of $3.01 for 2011 I get a CAGR of 4.89%. I can shift to 2001 to lower the initial point. If I use the adjusted value as previously posted -- the numbers look much better.

My sense is that much of the earnings exclusions will always be questionable as to whether they are true operating costs as to how the company does business -- and if I was considering the stock I am sure it would give me pause to base a valuation on the adjusted value?

Anyway -- just some random comments

MrT

--------------From Abbott's Notes for reference on 2011 EPS adjustements

2011 Net Earnings Excluding Specified Items excludes after-tax charges of $1.454 billion, or $0.92 per share, related to litigation reserves, $673 million, or $0.43 per share, relating to acquired in-process research and development related to the Reata and Biotest collaborations, $341 million, or $0.22 per share, associated with the acquisition of Solvay Pharmaceuticals, $76 million, or $0.05 per share, for the impairment of an R&D intangible asset, $137 million, or $0.09 per share, for the 2009 and 2010 impact of the change to a calendar year end for international operations, $110 million, or $0.07 per share, for previously announced restructuring in the pharmaceutical business, $311 million, or $0.19 per share, for cost reduction initiatives and other, and $80 million, or $0.05 per share, for other litigation reserves. These items were partially offset by a favorable adjustment from the resolution of prior years’ international and U.S. tax positions for $580 million, or $0.37 per share
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Author: ROCKJCP Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1633 of 1692
Subject: Re: Earnings Check? Date: 2/23/2012 5:06 PM
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With low P/E and solid dividend ABT has more room to run.

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Author: bhughes1001 Three stars, 500 posts Ticker Guide Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1635 of 1692
Subject: Re: Earnings Check? Date: 3/9/2012 9:48 AM
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Kahuna

From previous comments I know you have had good success with ABT.
I see a lot of articles, etc. pitching JNJ as the core pharm holding, but I just can't get comfortable with them.

What are your thoughts on the company split; do you see it as a plus?

Thanks

BH

Long ABT

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Author: Ga1Dawg Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1636 of 1692
Subject: Re: Earnings Check? Date: 3/9/2012 12:39 PM
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With low P/E and solid dividend ABT has more room to run.
**********************
ABT's PE is 19.23 (Trailing Twelve Months)
ABT's average PE for the last 5 years was 17.23

http://eresearch.fidelity.com/eresearch/evaluate/fundamental...

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Author: ROCKJCP Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1637 of 1692
Subject: Re: Earnings Check? Date: 3/12/2012 11:27 AM
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ABT @58.15 P/E 12.44 YLD 3.52 All very good numbers with room to the upside.

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Author: BuildMWell Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1638 of 1692
Subject: Re: Earnings Check? Date: 3/12/2012 4:20 PM
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ROCKJCP SAYS, "ABT @58.15 P/E 12.44 YLD 3.52 All very good numbers with room to the upside."

BUT, if you click on the (ABT) symbol next to the board name, you will find the P/E ratio noted as 19.25. This apparently assumes earnings of $2.87/share with the present price at $58.20/share.

The "experts" have put out a consensus trailing earnings estimate of $5.01/share and $5.32/share for the forward earnings. This puts the P/E ratio at 10.94:1 to 11.62:1. So, it is all about what one believes and who one trusts to get the numbers right. The low EPS that created the 19.25:1 P/E is based on the "Oops!" that ABT reported in 2011. The present quarter's earnings were low and the reasons have been explained by management. However, the numbers are what they are and the 19.25 P/E ratio is accurate if we agree to ignore all of the positive aspects of the future earnings potential of Abbott Labs. One bad quarter does not guarantee a bad company.

Actually, the more people who choose to believe that ABT's true P/E ratio is close to 20:1, the better for us buyers of the stock. Sooner or later, Mr. Market will wake up and realize ABT is under valued by a large margin. Or, we may wake up and realize we have been overly zealous in our EPS expectations. Time will tell because the earnings will be what Abbott reports them to be. That assumes we believe management will give us the correct numbers.

It seems to me there is a great deal of assumin' and believin' goin' on around this old market.

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Author: ROCKJCP Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1639 of 1692
Subject: Re: Earnings Check? Date: 3/13/2012 3:57 PM
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Numbers are from Fidelity and analysts confirm positive trends at ABT.

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Author: ROCKJCP Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1641 of 1692
Subject: Re: Earnings Check? Date: 3/15/2012 4:28 PM
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ABT is well healed and P/E matters above 19. Yield is comforting. Check out ISIS that has many big partners now and drug launch this year. Developement platform is most interesting.

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