Abbott Stock Falls in Pre-Market Despite Q2 Earnings and Sales Beat

Abbott Laboratories ABT reported second-quarter 2025 adjusted earnings per share (EPS) of $1.26, which beat the Zacks Consensus Estimate by 0.8%. The figure improved 10.5% from the prior-year quarter’s level.

GAAP EPS was $1.01 compared with 74 cents in the second quarter of 2024.

Following the earnings announcement, ABT stock fell 5% at pre-market trading today. The share price drop might be due to its reserved third-quarter guidance, which came in slightly below the Zacks Consensus Estimate.

ABT’s Q2 Revenues

Worldwide sales of $11.14 billion were up 7.4% year over year on a reported basis. The top line surpassed the Zacks Consensus Estimate by 0.6%.

Organically, sales improved 6.9% year over year. Organic sales, ex-COVID rose 7.5% year over year.

ABT’s Q2 Results in Detail

Abbott operates through four segments — Established Pharmaceuticals, Medical Devices, Nutrition and Diagnostics.

Established Pharmaceuticals’ product sales increased 6.9% on a reported basis (7.7% on an organic basis) to $1.38 billion.

Organic sales in key emerging markets improved 8.7% year over year. This was led by double-digit growth in several countries, including Asia, Latin America and the Middle East.

In the second quarter, the Medical Devices segment’s sales rose 13.4% year over year on a reported basis (12.2% organically) to $5.37 billion.

Sales growth was led by Diabetes Care, Structural Heart and Heart Failure and Electrophysiology. Several products, including FreeStyle Libre, Navitor, TriClip, and AVEIR, contributed to the strong performance.

The Diabetes Care division reported organic sales growth of 19.6% year over year, led by sales of continuous glucose monitors, which accounted for $1.90 billion of total sales. Structural Heart sales rose 11.7%, and Heart Failure sales improved 14% year over year organically.

The Vascular division recorded organic sales growth of 3.5%. The Electrophysiology, Rhythm Management and Neuromodulation divisions recorded organic growth of 10.3%, 9.8% and 4.3%, respectively, in the quarter under review.

For the second quarter, Nutrition sales rose 2.9% year over year on a reported basis (up 3.4% organically) to $2.21 billion.

Pediatric Nutrition sales were up 0.2%, and Adult Nutrition sales improved 6.6% organically. According to the company, Adult Nutrition sales benefited from the strong global growth of Ensure and Glucerna, Abbott's market-leading brands.

For the second quarter, Diagnostics sales declined 1% year over year on a reported basis (down 1.4% organically) to $2.17 billion. Organic sales, ex-COVID, rose 0.8%.

Core Laboratory Diagnostics sales were up 1.6% organically. Molecular Diagnostics’ sales declined 3.4% on an organic basis. Rapid Diagnostics sales were down 6.8%. Point of Care Diagnostics sales decreased 5.2%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Margin Details of ABT

In the second quarter, the gross profit rose 8.9% year over year to $6.29 billion despite a 5.4% increase in the cost of products sold (excluding amortization expense). The gross margin expanded 79 basis points (bps) to 56.4%.

Selling, general and administration expenses rose 5.3% year over year to $3.09 billion. Research and development expenses rose 3.9% year over year to $725 million. The company reported an adjusted operating profit of $2.47 billion, up 15.5% year over year. Also, the adjusted operating margin expanded 156 bps to 22.2%.

ABT’s 2025 Financial Guidance

Abbott expects full-year adjusted diluted EPS to be in the range of $5.10-$5.20 (earlier $5.05-$5.25). The Zacks Consensus Estimate for the metric is pegged at $5.16.

Abbott Laboratories Price, Consensus and EPS Surprise

Abbott Laboratories price-consensus-eps-surprise-chart | Abbott Laboratories Quote

Full-year 2025 organic sales growth, excluding COVID-19 testing-related sales, is expected to be in the range of 7.5-8.0%, or 6.0-7.0% when including COVID-19 testing-related sales. The Zacks Consensus Estimate for sales is currently pegged at $44.70 billion, suggesting a 6.6% improvement from the 2024 level.

For the third quarter of 2025, adjusted diluted EPS is expected to be between $1.28 and $1.32. The Zacks Consensus Estimate for the metric is pegged at $1.34.

Our Take

Abbott exited the second quarter of 2025 with better-than-expected results. Both its earnings and revenues beat their respective estimates. Additionally, the figures improved on a year-over-year basis.

All business segments experienced growth during the reported quarter, except Diagnostics. Meanwhile, Abbott’s Diagnostics sales growth continued to be adversely impacted by year-over-year declines in COVID-19 testing-related sales, along with volume-based procurement programs in China.

During the reported quarter, Abbott announced favorable data from the AVEIR Conduction System Pacing (CSP) clinical feasibility study. Additionally, the company received FDA approval for its Tendyne transcatheter mitral valve replacement (TMVR) system — a first-of-its-kind device to help treat people with mitral valve disease. Meanwhile, Abbott has initiated plans to develop a new cardiovascular device manufacturing facility in the state of Georgia, expected to be completed by 2028.

In addition, the expansion of both margins is encouraging.

ABT’s Zacks Rank and Other Key Picks

Abbott currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks from the broader medical space are Veeva Systems VEEV, Intuitive Surgical ISRG and Boston Scientific BSX.

Veeva Systems, currently sporting a Zacks Rank #2, reported first-quarter fiscal 2026 adjusted EPS of $1.97, which surpassed the Zacks Consensus Estimate by 13.2%. Revenues of $759 million beat the consensus mark by 4.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

VEEV has an estimated long-term earnings growth rate of 23.3% compared with the industry’s 19.1%. The company beat on earnings in each of the trailing four quarters, the average surprise being 10%.

Intuitive Surgical, carrying a Zacks Rank #2 at present, posted first-quarter 2025 adjusted EPS of $1.81, which exceeded the Zacks Consensus Estimate by 5.9%. Revenues of $2.25 billion surpassed the Zacks Consensus Estimate by 3.3%.

ISRG has an estimated long-term earnings growth rate of 15.1% compared with the industry’s 14.4%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 14.6%.

Boston Scientific, carrying a Zacks Rank #2, reported a first-quarter 2025 adjusted EPS of 75 cents, which beat the Zacks Consensus Estimate by 0.1%. Revenues of $4.66 billion topped the Zacks Consensus Estimate by 20.9%.

BSX has a long-term earnings growth rate of 13.2% compared with the industry’s 13.9%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.8%.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research