Eased Tariff Impact Fails To Lift Abbott As Outlook Cut Disappoints Investors

Abbott Laboratories (NYSE:ABT) reported better-than-expected sales and profits in the second quarter, but the stock still plummeted nearly 10% after management dialed back earnings and growth projections for the rest of the year.

The company reported second-quarter sales of $11.14 billion, beating the consensus of $11.07 billion.

Second-quarter sales increased 7.4% on a reported basis, 6.9% on an organic basis, or 7.5% when excluding COVID-19 testing-related sales.

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The U.S. MedTech giant reported adjusted earnings of $1.26, beating the consensus of $1.25, and within the management guidance of $1.23-$1.27.

“Halfway through the year, we delivered high single-digit organic sales growth, double-digit EPS growth, significantly expanded our margin profiles, and continued to advance key programs through our new product pipeline,” said Robert B. Ford, chairman and chief executive officer, Abbott. “We see this momentum carrying into 2026.”

Medical Devices sales increased 13.4% on a reported basis and 12.2% on an organic basis to $5.37 billion.

Sales growth in the quarter was led by double-digit growth in Diabetes Care, Heart Failure, Structural Heart, and Electrophysiology.

Several products contributed to the performance, including FreeStyle Libre, Navitor, TriClip, and AVEIR.

In Diabetes Care, sales of continuous glucose monitors were $1.9 billion and grew 21.4% on a reported basis and 19.6% organically. 

Worldwide Nutrition sales increased 2.9% (+3.4% on an organic basis) to $2.21 billion.

Growth in the quarter was led by Adult Nutrition, where global sales increased 6.1% (+6.6% on an organic basis), led by strong growth of Ensure and Glucerna.

Global Diagnostics sales decreased 1% (-1.4% on an organic basis) and increased 0.8% when excluding COVID-19 testing-related sales.

The year-over-year decline in COVID-19 testing-related sales and volume-based procurement programs in China impacted diagnostics sales growth.

COVID-19 testing-related sales were $55 million in the quarter, compared to $102 million a year ago.

Established Pharmaceuticals sales increased 6.9% (+7.7% on an organic basis) to $1.38 billion.

Abbott’s reported operating margin of 18.4%, with an adjusted operating margin of 22.9%, which reflects a 100 basis point increase.

Guidance

Abbott narrowed full-year 2025 adjusted earnings guidance from $5.05-$5.25 per share to $5.10-$5.20 per share compared to the consensus of $5.16.

The company expects organic sales growth of 7.5%-8.0% compared to prior guidance of 7.5%-8.5%, or 6.0% to 7.0% when including COVID-19 testing-related sales.

Abbott forecasts an adjusted operating margin of approximately 23.5% of sales, down from prior guidance of 23.5%- 24.0%.

Abbott expected third-quarter 2025 adjusted earnings of $1.28-$1.32 per share, compared to the consensus of $1.34 per share.

During the earnings conference call, an Abbott executive addressed the impact of tariffs, reporting that the estimated headwind has been revised down to $200 million for the year, lower than previous estimates. 

Price Action: ABT stock is trading lower by 8.00% to $121.21 at last check Thursday.

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