Abbott Q2 2025 presentation: 7.5% organic growth, shares drop despite strong results

Abbott Laboratories (NYSE:ABT) reported second-quarter 2025 results on July 17, showing continued momentum with 7.5% organic sales growth in its underlying base business. Despite the solid performance, shares fell approximately 4.7% in premarket trading to $125.50, suggesting investors may have expected even stronger results or guidance.

Quarterly Performance Highlights

Abbott reported worldwide sales of $11.1 billion for Q2 2025, with adjusted diluted earnings per share (EPS) of $1.26. This represents sequential improvement from Q1 2025, when the company reported revenue of $10.36 billion and EPS of $1.09.

The company’s Medical (TASE:BLWV) Devices segment led revenue generation with $5.4 billion in sales, accounting for nearly half of total company revenue. Both the Diagnostics and Nutrition segments contributed $2.2 billion each, while Established Pharmaceuticals added $1.4 billion to the top line.

Detailed Financial Analysis

Abbott’s Q2 results demonstrate continued execution of its growth strategy, with the 7.5% organic sales growth for the underlying base business representing a solid performance in the current economic environment. The company’s adjusted EPS of $1.26 reflects strong operational efficiency and effective cost management.

It’s worth noting that Abbott’s organic sales growth calculations exclude the impact of foreign exchange, COVID-19 testing sales, and the discontinued ZonePerfect® product line in the Nutrition business. This provides a clearer picture of the company’s core business performance.

Compared to Q1 2025, when Abbott reported a gross margin of 57.1% and an operating margin of 21%, the company continues to focus on margin expansion as part of its growth strategy. The sequential revenue increase from $10.36 billion in Q1 to $11.1 billion in Q2 represents approximately 7.1% growth quarter-over-quarter.

Strategic Initiatives

Abbott highlighted several key strategic initiatives during its presentation, with a particular focus on expanding its cardiac and structural heart portfolio. The company received FDA approval for its Tendyne™ transcatheter mitral valve replacement (TMVR) system, which it describes as a first-of-its-kind device to help treat people with mitral valve disease.

As shown in the presentation, this approval represents a significant advancement in Abbott’s structural heart portfolio, potentially opening new market opportunities in the treatment of mitral valve disease.

In the cardiac pacing space, Abbott announced progress with its AVEIR™ Conduction System Pacing clinical feasibility study, which the company notes is the world’s first evaluation of a leadless pacemaker delivering conduction pacing. This technology is designed to closely replicate the heart’s natural rhythm, offering a novel treatment option for patients with irregular heartbeats.

Additionally, Abbott completed enrollment in its FlexPulse U.S. IDE trial, which is evaluating the TactiFlex™ Duo Pulsed Field Ablation System. This system is designed to treat patients with heart rhythm disorders such as atrial fibrillation, further strengthening Abbott’s position in the electrophysiology market.

These initiatives align with comments made by CEO Robert Ford during the Q1 2025 earnings call, where he emphasized that "hope is not a strategy for us" and highlighted the value of Abbott’s diversification strategy. The company’s continued investment in innovation across multiple segments demonstrates this approach.

Forward-Looking Statements

Abbott maintained its full-year 2025 guidance, projecting adjusted diluted EPS of $5.10 to $5.20 and organic sales growth for the underlying base business of 7.5% to 8.0%. The decision to maintain rather than raise guidance despite the strong Q2 performance may partially explain the negative premarket stock reaction.

During the Q1 earnings call, Abbott had mentioned potential tariff impacts estimated at a few hundred million dollars in 2025 and unfavorable foreign exchange impacts on sales. These factors may continue to influence the company’s cautious outlook for the remainder of the year.

Abbott’s stock, which had shown strong momentum with a year-to-date return of 12.7% as of Q1 results, now faces some pressure following the Q2 presentation. The stock remains within its 52-week range of $99.71 to $141.23, but the premarket decline suggests investors may be reassessing their expectations for the second half of 2025.

The company’s continued focus on innovation, particularly in high-growth areas like structural heart and cardiac rhythm management, positions it well for long-term growth despite near-term market reactions to quarterly results.

Full presentation:

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