Abbott profit forecast falls short, ramps up US investing amid tariff pressure
The medical device maker's shares slid 8%, even as it announced a new plant in the U.S. to mitigate the hit from President Donald Trump's sweeping duties on trading partners.
Speaking on a post-earnings call, Chief Financial Officer Phil Boudreau said the impact of tariffs will likely be felt in the second half of the year, as the company works its way through its inventory.
Larger rival Johnson & Johnson (JNJ.N), opens new tab on Wednesday halved its expectations for tariff costs this year to about $200 million.
Abbott projected a profit of between $1.28 and $1.32 per share for the current quarter, below expectation of $1.34. It estimated annual sales growth to be between 7.5% and 8.0%, compared with the between 7.5% and 8.5% previously predicted.
With Abbott shares one of the best year-to-date performers in large and mega-cap medtech, its print needed to be nearly spotless to keep shares moving higher, BTIG analyst Marie Thibault said.
The company sees a $700 million hit to its diagnostics segment this year as the unit faces declining COVID testing revenue and pressure from a procurement program in China, which purchases medical devices in bulk at steep discounts.
"These headwinds are not going to be there in 2026", Abbott CEO Robert Ford told analysts on the call.
Abbott said it planned to build a manufacturing facility in Georgia by 2028 to support its cardiovascular business, adding to its April announcements for projects in Illinois and Texas, which are expected to go live by the end of the year.
The company's quarterly revenue came in at $11.14 billion, beating expectations of $11.07 billion, according to data compiled by LSEG.
Sales of Abbott's continuous glucose monitoring (CGM) devices, which include the FreeStyle Libre series and Lingo, jumped 21.4% to $1.9 billion in the second quarter.
On an adjusted basis, the company reported a profit of $1.26 per share for the second quarter, compared with analysts' average estimate of $1.25.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Independent
14 minutes ago
- The Independent
Donald Trump announces trade agreement with the European Union
Donald Trump announced a trade agreement with the European Union. The agreement will cut tariff rates on imports from the EU to 15 per cent. Conversely, US exports to the EU will become tariff-free under the new arrangement. Trump made the announcement alongside European Commission president Ursula von der Leyen at his Turnberry golf course in Scotland. Further details regarding the agreement were not immediately released by the White House.
Reuters
15 minutes ago
- Reuters
Reaction to US and EU trade deal
TURNBERRY, Scotland, July 27 (Reuters) - U.S. President Donald Trump on Sunday said the United States and the European Union had reached agreement on a trade deal that includes a 15% tariff on EU goods entering the U.S. and significant EU purchases of U.S. energy and military equipment. The deal also calls for $600 billion in investments in the U.S. by the European Union, he told reporters. This follows a U.S. deal with Japan on July 23 that cut tariffs on auto imports and other goods in exchange for a $550 billion package of U.S.-bound investment and loans. Major financial markets were still closed. The euro ended last week around three-week highs at $1.1738, while the STOXX 600 <.STOXX > hit its highest since early June last week as optimism built for an EU/U.S. trading deal. Following are comments from business leaders and companies, and market reaction to the announcement. COMMENTS: MICHAEL BROWN, SENIOR RESEARCH STRATEGIST, PEPPERSTONE, LONDON: "The EU is going to be hit with a 15% tariff which is pretty punchy but it's half of the 30% they were threatened with and it's well off the 50% that Trump had been throwing around at the start of the month so that's good news." "This is more a case of the risk of no deal being removed as opposed to whether it's 15%-20%, I'm not entirely sure that matters so much at least not in terms of how markets are going to trade in an hour or so when things get up and running for the week." "The two obvious reactions that you would expect are upside in the euro and upside in equity futures. I don't think equities in particular needed much of an excuse to rally and now they've got one." ERIC WINOGRAD, CHIEF ECONOMIST, ALLIANCEBERNSTEIN, NEW YORK: "This is very similar to the deal we reached with Japan." "We will need to see how long the sides stick to the deal. From a market perspective, it is reassuring in the sense that having a deal is better than not having a deal." RICK MECKLER, PARTNER, CHERRY LANE INVESTMENTS, NEW VERNON, NEW JERSEY: "It's really in line with the Japan deal, and I assume investors will view it positively as they viewed the Japan deal. The reality is there will be higher tariffs, which may lead to more inflation, depending on how much of it is absorbed by the manufacturers and how much of it is passed on to consumers. I think from the administration's point of view, they probably have begun to address the balance of trade issues. The question remains whether using tariffs as a way to address these imbalances is positive for the global economy or just a tax that helps with jobs here in the U.S."
The Sun
an hour ago
- The Sun
US and EU agree landmark trade deal after months of talks, Donald Trump says
The US and EU have agreed on a trade deal, says US President Donald Trump. Trump announced the deal as he hosted EU chief Ursula von der Leyen at one of his golf resorts in Scotland. 1 "We have reached a deal. It's a good deal for everybody," Trump said. "It's going to bring us closer together... it's a partnership in a sense," he added. Meanwhile, von der Leyen hailed it as a "huge deal", which came after "tough negotiations". The US and EU have longed enjoyed one of the world's largest trade relationships. Total trade in goods between the EU and US totalled around $975.9bn (£751.4bn) in 2024, estimates say. The US imported about $606bn (£451bn) worth of goods from the EU and exported around $370bn (£276bn) last year. Trump has said this trade deficit means the US is "losing".
