Abbott Laboratories ABT is scheduled to report fourth-quarter 2015 and full-year results before the opening bell on Jan 28, 2016.

Abbott Labs has an impressive track record with the company beating estimates in each of the trailing four quarters with an average earnings surprise of 5.55%. Let us see how things are shaping up for this announcement.

Will Currency Continue to Impact?

Although growth has slowed down in emerging markets, these economies still outpace the developing ones on the back of national policies that focus on expanding access to care; and favorable trends like increasing birth rates, aging populations, and adoption of western standards and technologies.

The nutrition business continues to drive revenues as the company expands its pediatric nutrition portfolio through product launches in the U.S. and ex-U.S. markets (including the launch of a non-GMO labeled formula, Similac Advance, in the U.S.; Eleva, in China). However, the adult nutrition business continues to be impacted by competition and market dynamics. On the other hand, the integration of CFR Pharmaceuticals boosted the established pharmaceuticals division (EPD).

For the fourth quarter, sales (on an operational basis) are expected to grow in the mid single digits. However, the top line may be adversely affected by currency fluctuation to the tune of 6.5%, leading to a sales decline in the low single digits. On a segmental basis, the company expects operational sale at the global nutritional business and diagnostic unit to grow in the mid single digits. Vascular sales are estimated to be relatively flat. The global diabetes care business is expected to grow in the low single digits on an operational basis. Growth at the medical optics business is anticipated to be in the mid single digits, while EPD is expected to continue generating low double-digit sales growth.

Concurrent with its third-quarter earnings release, Abbott Labs narrowed its full-year earnings per share outlook to $2.14–$2.16. Unfavorable movement in foreign currency rates will impact sales by about 8% in 2015.

What Our Model Indicates

Our proven model does not conclusively show that Abbott Labs is likely to beat on earnings this quarter. That is because a stock needs to have both a positive Earnings ESP  and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) to likely post an earnings beat. However, that is not the case here as you will see below.

Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is -1.64%. This is because the Most Accurate estimate stands at 60 cents, while the Zacks Consensus Estimate is pegged higher at 61 cents.

Zacks Rank: Abbott Labs currently carries a Zacks Rank #4 (Sell). As it is, we caution against stocks with Sell-rated stocks (Zacks Rank #4 and #5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks That Warrant a Look

Here are some health care stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.

AstraZeneca PLC AZN has an Earnings ESP of +24.32% and a Zacks Rank #2. The company is scheduled to report 2015 results on Feb 4.

Gilead Sciences Inc. GILD has an Earnings ESP of +2.75% and a Zacks Rank #1. The company will report fourth-quarter 2015 results on Feb 2.

AbbVie Inc. ABBV has an Earnings ESP of 0.88% and a Zacks Rank #3. The company is scheduled to report fourth-quarter 2015 results on Jan 29.

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