Abbott Laboratories (ABT) Q2 2025 Earnings Call Highlights: Strong Growth in Medical Devices ...
Adjusted Earnings Per Share (EPS): $1.26, 11% growth compared to prior year.
Gross Margin: 57% of sales, 100 basis points increase from prior year.
Operating Margin: 22.9% of sales, 100 basis points increase from prior year.
Nutrition Sales Growth: 3.5% increase in the quarter.
Diagnostics Sales Decline: 1.5% decrease, impacted by COVID testing sales decline and China procurement programs.
EPD Sales Growth: Nearly 8% increase, surpassing $1 billion in quarterly sales.
Medical Devices Sales Growth: 12% increase, driven by diabetes care, heart failure, structural heart, electrophysiology, and cardiac rhythm management.
Diabetes Care Sales: $1.9 billion, 19.5% growth.
Heart Failure Sales Growth: 14% increase in the quarter.
Foreign Exchange Impact: Favorable 0.5% impact on second quarter sales.
R&D and SG&A Expenses: Adjusted R&D at 6.3% of sales; adjusted SG&A at 27.7% of sales.
Third Quarter EPS Forecast: $1.28 to $1.32.
Warning! GuruFocus has detected 2 Warning Sign with WIT.
Release Date: July 17, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Abbott Laboratories (NYSE:ABT) reported high single-digit sales growth and over 100 basis points of margin expansion in both gross and operating margins.
The company achieved double-digit earnings per share growth, exceeding consensus estimates.
Sales in the Nutrition segment increased by 3.5%, driven by strong demand for Ensure and Glucerna brands.
Medical Devices sales grew by 12%, with significant contributions from diabetes care, heart failure, structural heart, electrophysiology, and cardiac rhythm management.
Abbott Laboratories (NYSE:ABT) is making progress in its biosimilars portfolio, with 10 regulatory approval submissions completed and launches projected to begin in 2026.
Negative Points
Diagnostics sales declined by 1.5% due to a decrease in COVID testing sales and volume-based procurement programs in China, representing a significant headwind.
The company faces challenges in the China Core Lab market, impacting overall sales growth.
There are ongoing headwinds from COVID testing sales drop-off and changes in US funding for HIV testing.
Abbott Laboratories (NYSE:ABT) is experiencing a $200 million impact from tariffs, which is affecting its financial performance.
Foreign exchange remains a headwind on the bottom line, despite being neutral on the top line.
Q & A Highlights
Q: Can you provide context on Abbott's 2025 performance and the headwinds faced this year? A: Robert Ford, CEO, explained that Abbott's goal is to ensure each business meets and exceeds expectations. Despite challenges like the decline in COVID testing sales and issues in the China Core Lab market, Abbott is committed to high single-digit growth and double-digit EPS growth. The company is optimistic about 2026, with headwinds expected to be behind them and new product launches on the horizon.
Q: What trends are you seeing in the Diabetes and Electrophysiology (EP) product lines? A: Robert Ford noted strong performance in both areas, with US Libre sales up nearly 26% and EP showing double-digit growth. In Diabetes, the Basal segment and non-insulin user segment are doing well, and the dual analyte sensor is expected to drive further growth. In EP, the launch of Volt internationally is progressing well, with positive feedback on its performance.
Q: What is Abbott's reaction to the proposed competitive bidding for CGM and comments on wearables? A: Robert Ford stated that the CMS proposal for competitive bidding was expected and should not impact Abbott significantly. Regarding wearables, Ford emphasized their power in behavior modification and health improvement, aligning with Abbott's mission. He also confirmed that the dual ketone sensor could drive share gains in intensive insulin patients.
Q: Can you provide an update on the CRM business and its growth trajectory? A: Robert Ford highlighted that the CRM business has shown sustainable growth, with AVEIR pacing systems driving this momentum. The business has seen increased physician training and implant rates, and Abbott plans to continue innovating with next-generation products and international expansion.
Q: What are Abbott's plans for M&A, and how does it fit into the company's strategy? A: Robert Ford indicated that Abbott is focused on strategic M&A opportunities in diagnostics and devices, aiming for acquisitions that fit strategically and generate attractive returns. The company is selective due to its strong organic growth pipeline.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Wire
a few seconds ago
- Business Wire
Karman Space & Defense, Inc. Announces Pricing of its Upsized Public Offering
HUNTINGTON BEACH, Calif.--(BUSINESS WIRE)-- Karman Space & Defense (NYSE: KRMN) ('Karman' or the 'Company'), a leader in the rapid design, development and production of critical, next-generation system solutions for launch vehicle, satellite, spacecraft, missile defense, hypersonic and UAS customers, today announced the pricing of its underwritten public offering of 21,000,000 shares of its common stock at a price to the public of $49.00 per share (the 'Common Stock'). The offering consists of 21,000,000 shares of Common Stock to be sold by certain of Karman's existing stockholders (the 'Selling Stockholders'). The Selling Stockholders will receive all proceeds from the offering. No shares are being sold by Karman in the offering and Karman will not receive any proceeds from the offering. The offering is expected to close on July 25, 2025, subject to customary closing conditions. In addition, certain of the Selling Stockholders have granted the underwriters a 30-day option to purchase up to an additional 3,150,000 shares of Common Stock. Karman will not receive any proceeds from the sale of shares by the selling stockholder if the underwriters exercise their option to purchase additional shares of Common Stock. Citigroup and Evercore ISI are acting as book-running managers for the proposed offering and as representatives of the underwriters for the proposed offering. Baird, RBC Capital Markets and William Blair are acting as joint bookrunners for the proposed offering. The proposed offering will be made only by means of a prospectus. A registration statement relating to the Common Stock was declared effective by the U.S. Securities and Exchange Commission on July 23, 2025. The offering is being made only by means of a prospectus. Copies of the prospectus relating to the offering may be obtained from: Citigroup, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, by telephone: (800) 831-9146 and Evercore Group L.L.C., Attention: Equity Capital Markets, 55 East 52nd Street, 35th Floor, New York, New York 10055, by telephone: (888) 474-0200, or by email: This press release shall not constitute an offer to sell or a solicitation of an offer to buy the Common Stock, nor shall there be any sale of the Common Stock in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. ABOUT KARMAN SPACE & DEFENSE Karman Space & Defense is a leader in the rapid design, development and production of critical, next-generation system solutions for launch vehicle, satellite, spacecraft, missile defense, hypersonic and UAS customers. Building on nearly 50 years of success, we deliver Payload & Protection Systems, Aerodynamic Interstage Systems, and Propulsion & Launch Systems to more than 70 prime contractors supporting over 100 space and defense programs. Forward-Looking Statements This press release includes express or implied forward-looking statements. Forward-looking statements include all statements that are not historical facts including those that reflect our current views with respect to, among other things, our operations and financial performance. Forward-looking statements are included throughout this press release. We have used the words 'anticipate,' 'assume,' 'believe,' 'continue,' 'could,' 'estimate,' 'expect,' 'expectation,' 'believe,' 'may,' 'could,' 'intend,' 'belief,' 'plan,' 'estimate,' 'target,' 'predict,' 'likely,' 'seek,' 'project,' 'model,' 'ongoing,' 'will,' 'should,' 'forecast,' 'outlook' or similar terminology. These statements are based on and reflect our current expectations, estimates, assumptions and/ or projections, our perception of historical trends and current conditions, as well as other factors that we believe are appropriate and reasonable under the circumstances. Forward-looking statements are neither predictions nor guarantees of future events, circumstances or performance and are inherently subject to known and unknown risks, uncertainties and assumptions that could cause our actual results to differ materially from those indicated by those statements. These risks and uncertainties include, but are not limited to, risks and uncertainties associated with the consummation of the offering and other risks described in Karman's registration statement on Form S-1, as it may be amended from time to time, and its Annual Report on Form 10-K for the year ended December 31, 2024 and any subsequent filings with the U.S. Securities and Exchange Commission. There can be no assurance that our expectations, estimates, assumptions and/ or projections will prove to be correct or that any of our expectations, estimates or projections will be achieved. The forward-looking statements contained in this press release are based on management's current expectations and are not guarantees of future performance. Our expectations and beliefs are expressed in management's good faith, and we believe there is a reasonable basis for them, however, the forward-looking statements are subject to various known and unknown risks, uncertainties, assumptions, or changes in circumstances that are difficult to predict or quantify. Actual results may differ materially from these expectations due to changes in global, regional, or local economic, business, competitive, market, regulatory, and other factors, many of which are beyond our control.
Associated Press
2 minutes ago
- Associated Press
The US fertility rate reached a new low in 2024, CDC data shows
NEW YORK (AP) — The fertility rate in the U.S. dropped to an all-time low in 2024 with less than 1.6 kids per woman, new federal data released Thursday shows. The U.S. was once among only a few developed countries with a rate that ensured each generation had enough children to replace itself — about 2.1 kids per woman. But it has been sliding in America for close to two decades as more women are waiting longer to have children or never taking that step at all. The new statistic is on par with fertility rates in western European countries, according to World Bank data. Alarmed by recent drops, the Trump administration has taken steps to increase falling birth rates, like issuing an executive order meant to expand access to and reduce costs of in vitro fertilization and backing the idea of 'baby bonuses' that might encourage more couples to have kids. But there's no reason to be alarmed, according to Leslie Root, a University of Colorado Boulder researcher focused on fertility and population policy. 'We're seeing this as part of an ongoing process of fertility delay. We know that the U.S. population is still growing, and we still have a natural increase — more births than deaths,' she said. The U.S. Centers for Disease Control and Prevention released the statistic for the total fertility rate with updated birth data for 2024. In the early 1960s, the U.S. total fertility rate was around 3.5, but plummeted to 1.7 by 1976 after the Baby Boom ended. It gradually rose to 2.1 in 2007 before falling again, aside from a 2014 uptick. The rate in 2023 was 1.621, and inched down in 2024 to 1.599, according to the CDC's National Center for Health Statistics. Birth rates are generally declining for women in most age groups — and that doesn't seem likely to change in the near future, said Karen Guzzo, director of the Carolina Population Center at the University of North Carolina. People are marrying later and also worried about their ability to have the money, health insurance and other resources needed to raise children in a stable environment. 'Worry is not a good moment to have kids,' and that's why birth rates in most age groups are not improving, she said. Asked about birth-promoting measures outlined by the Trump administration, Guzzo said they don't tackle larger needs like parental leave and affordable child care. 'The things that they are doing are really symbolic and not likely to budge things for real Americans,' she said. Increase in births in new data The CDC's new report, which is based on a more complete review of birth certificates than provisional data released earlier this year, also showed a 1% increase in births — about 33,000 more — last year compared to the prior year. That brought the yearly national total to just over 3.6 million babies born. But this is different: The provisional data indicated birth rate increases last year for women in their late 20s and 30s. However, the new report found birth rate declines for women in their 20s and early 30s, and no change for women in their late 30s. What happened? CDC officials said it was due to recalculations stemming from a change in the U.S. Census population estimates used to compute the birth rate. That's plausible, Root said. As the total population of women of childbearing age grew due to immigration, it offset small increases in births to women in those age groups, she said. ___ The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute's Department of Science Education and the Robert Wood Johnson Foundation. The AP is solely responsible for all content.
Associated Press
2 minutes ago
- Associated Press
Texas AG claimed three homes as primary residence. Democrats are being probed for similar issue
WASHINGTON (AP) — Texas Attorney General Ken Paxton and his wife, Angela, are longtime owners of a $1.5 million house in a gated community outside Dallas. In 2015, they snapped up a second home in Austin. Then another. The problem: Mortgages signed by the Paxtons contained inaccurate statements declaring that each of those three houses was their primary residence, enabling the now-estranged couple to improperly lock in low interest rates, according to an Associated Press review. The lower rates will save the Paxtons tens of thousands of dollars in payments over the life of the loan, legal experts say. The records also revealed that the Paxtons collected an impermissible homestead tax break on two of those homes, and they have routinely flouted lending agreements on some of their other properties. It is a federal and state crime to knowingly make false statements on mortgage documents. It's also against the law in Texas to collect a homestead tax break on two separate properties. Violating the terms of a mortgage could allow lenders recourse to seek full payment of a loan, according to legal experts. Mortgages have become political fodder The mortgage revelations are likely to become fodder in the Republican primary for a U.S. Senate seat in which Paxton is seeking to topple the incumbent, John Cornyn. The situation is further complicated by the Trump administration's criminal pursuit of Democrats over similar issues. President Donald Trump has accused two of his political foes — Sen. Adam Schiff of California and New York Attorney General Letitia James — of committing mortgage fraud, though legal experts say the circumstances are less serious. The Democrats have long been objects of Trump's ire for having led various investigations into his conduct as president and as a business executive. Paxton, himself, has weighed in on the investigation of James, saying he hoped authorities would look into her conduct. 'I hope that if she's done something wrong, I hope that she's actually held accountable,' he told supporters last month. The Justice Department has launched a criminal investigation of James, FBI director Kash Patel told Fox News in May. The department received a criminal referral for Schiff last week from the Federal Housing Finance Agency, its director William Pulte confirmed in a social media post. Neither the Justice Department nor the FHFA responded to an inquiry about whether they may investigate Paxton, too. James' attorney, Abbe Lowell, urged the Trump administration to investigate Paxton instead. 'If this administration was genuinely interested in rooting out fraud, it appears they should stop wasting their time on the baseless and discredited allegations against the New York Attorney General James and turn their attention to Texas,' said Lowell, a prominent Washington attorney whose past clients include Hunter Biden, Ivanka Trump and Jared Kushner. In a statement, Marisol Samayoa, a Schiff spokeswoman, blasted the criminal referral as 'a transparent attempt' by Trump 'to punish a perceived political foe who is committed to holding him to account.' She added that Schiff disclosed to his lenders that he owned another home that was a principal residence and sought guidance from an attorney. It is unlikely that Paxton, a staunch Trump ally, will face the same federal scrutiny as James and Schiff. It's equally doubtful that Paxton will face much legal trouble in Texas: His office is one of the primary agencies tasked with investigating allegations of mortgage fraud. Ken Paxton and his spokesman did not respond to multiple requests for comment. Angela Paxton, who is a state senator in Texas, did not respond to requests made through her office. Three of the Paxtons' homes are each listed as a primary residence Documents reviewed by the AP show the Paxtons hold mortgages on three homes — one in suburban Dallas, two in Austin — that are each listed as their primary residence. The designation comes with a considerable financial upside. Interest rates on primary homes are significantly lower than those for mortgages on secondary homes or investment properties, saving buyers tens of thousands of dollars — if not more — over the life of a loan. Making a case against Paxton would require 'establishing both that Paxton was aware of the contents of the mortgage document, and also that he was actively aware at the time that he signed it that this was not going to be a primary residence,' said Jennifer E. Laurin, a professor at the University of Texas Law School in Austin. Legal experts say it is possible that the Paxtons' lenders prepared the documents and that the couple did not carefully review them before signing. Even if that were the case, some legal experts say that Paxton, as an attorney and Texas' top law enforcement officer, ought to have known better. 'If he filled out lender documents knowing that they were false, then that is a false statement to obtain a mortgage on favorable terms. That would be actionable,' said Arif Lawji, a veteran Texas real estate attorney. 'He's the chief enforcement officer. You have to be accountable for stuff you do that's wrong.' Paxton collected two 'homestead' tax breaks Low interest rates are not the only perk the Paxtons secured, records show. In 2018, they simultaneously collected homestead property tax breaks on their family's home in suburban Dallas, as well as on a $1.1 million home in Austin, property records and tax statements show. A homestead tax break is a property tax reduction that a homeowner is only eligible to collect on one property that is also their primary home. The suburban Dallas home is where the Paxtons' family has long resided. It's where Ken and Angela Paxton are registered to vote. It is located in the state Senate district that Angela Paxton represents in the Legislature, which Ken Paxton held before his election in 2014 to be attorney general. It's also where Ken Paxton's Senate campaign website until recently said he lived. Lawji said the Paxtons' simultaneous collection of two homestead tax breaks appears to be a more clearcut violation. That is because one must obtain a form and submit it to taxing authorities to receive such a tax break, making it an 'intentional act,' he said. The tax break was worth several thousand dollars, a fact that confounded real estate lawyers. 'Why would you try to do all of this,' Lawji said, 'when you are the attorney general? That's a bigger question to me than the money, when you are AG and have to enforce this law.' Paxton may have violated mortgage terms by renting properties Separately, land records indicate the Paxtons may have violated the terms of at least two mortgages on other houses they own. The mortgage on a home in College Station, Texas, says the property is for the Paxtons' exclusive use and cannot be rented out. Doing so would be grounds for terminating the mortgage, the document states. The home has been listed for rent on real estate websites on-and-off since at least 2022. Ken Paxton also holds a $1.2 million mortgage on a '5 bedroom luxury cabin' in Broken Bow, Oklahoma, that is for rent on Airbnb and other short-term rental sites, records show. The property's mortgage stipulates that it cannot be rented out. Representatives for Stifel Bank, Cornerstone Home Lending and Benchmark Mortgage, which issued the mortgages in question, did not respond to requests for comment. Schiff and James come under fire from GOP Paxton's real estate dealings are in many ways distinct from those of James and Schiff, the Democrats targeted by the Trump administration. The investigation of James centers on forms she signed in 2023 while helping a niece buy a home in Virginia. One form stated that James intended to occupy the home as her 'principal residence.' But in other documents, the New York attorney general made clear she had no intention of living there. An email to the mortgage loan broker two weeks before she signed the documents stated the property 'WILL NOT be my primary residence.' 'As I've said from the beginning, if prosecutors want to know that truth about Attorney General James' mortgage applications, we are ready and waiting with the facts,' said Lowell, James' attorney. For over a decade, Schiff owned homes in Maryland and California, the state he represents, that were both designated as his primary residence. In 2020, then a congressman, Schiff designated his Maryland property as a second home — a step Paxton has not taken. Paxton has faced legal and political challenges Paxton's real estate dealings are not the first time he has drawn scrutiny for his conduct while in office. Before his election as attorney general, Paxton, then a state senator, admitted in 2014 to violating Texas securities law and paid a fine. He spent roughly 10 years under state indictment on securities charges while serving as attorney general. The charges were eventually dropped in 2024. Other alleged misdeeds in office led to his impeachment by Texas' GOP-controlled House in 2023. He was acquitted in a trial by the Senate. Angela Paxton did not cast a vote in his impeachment trial and recently filed for divorce, citing Ken Paxton's infidelity and other 'recent discoveries.' She did not elaborate. What ultimately unleashed the impeachment push was Paxton's relationship with Austin real estate developer Nate Paul, who pleaded guilty this year to one count of making a false statement to a financial institution. In 2020, eight top aides in Paxton's office told the FBI they were concerned the state's top law enforcement official was misusing his office to help Paul over the developer's unproven claims about an elaborate conspiracy to steal $200 million of his properties. The House impeachment managers accused Paxton of attempting to interfere in foreclosure lawsuits and issuing legal opinions to benefit Paul. They also alleged that Paul employed a woman with whom Paxton had an affair in exchange for legal help and that the developer paid for expensive renovations to the attorney general's home in Austin. That would be the same house that he declared in mortgage documents was his third primary residence.
