Release Date: April 16, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Abbott Laboratories (ABT, Financial) achieved high single-digit sales growth and double-digit earnings per share growth in the first quarter of 2025.
• The company's nutrition segment saw a 7% increase in sales, driven by high-single-digit growth in adult nutrition and double-digit growth in US pediatric nutrition.
• Medical devices sales grew 12.5%, with notable growth in diabetes care, electrophysiology, and structural heart segments.
• Abbott Laboratories (ABT) expanded its gross margin by 140 basis points and operating margin by 130 basis points compared to the prior year.
• The company is on track to launch more than 25 key new products over the next three years, indicating a strong pipeline for future growth.

Negative Points

• Sales in the diagnostics segment declined by 5% due to a year-over-year decline in COVID-19 testing sales.
• The company faces financial impacts from new tariff policies, with an estimated tariff impact of a few hundred million dollars in 2025.
• Foreign exchange had an unfavorable year-over-year impact of 2.8% on first-quarter sales.
• Volume-based procurement programs in China negatively impacted core laboratory diagnostics growth.
• The company is navigating challenges in the Chinese market due to price-driven volume-based procurement programs, which have not resulted in volume offsets.

Q & A Highlights

Q: Can you explain the impact of tariffs on Abbott's financials and how the company plans to mitigate these effects? A: Robert Ford, CEO, explained that the tariffs are expected to have a financial impact of a few hundred million dollars in 2025, primarily affecting the US and China. Abbott plans to mitigate this through its diversified manufacturing network, which includes 90 sites worldwide. The company is leveraging its global manufacturing strategy to manage the impact and is considering various scenarios to offset the tariffs, including potential adjustments in FX, interest rates, and tax strategies.

Q: What is the current status and future outlook for Abbott's Electrophysiology (EP) business, particularly regarding the Volt PFA system? A: Robert Ford, CEO, expressed optimism about the EP business, highlighting the early approval of the Volt PFA system in Europe. The initial feedback has been positive, and Abbott plans to expand the rollout across European markets throughout the year. The US approval is expected by early next year. The company is also focusing on integrating the Volt system with its existing mapping technologies to drive adoption.

Q: How is Abbott addressing the challenges in its diagnostics business, especially in China? A: Robert Ford, CEO, acknowledged the challenges in China due to volume-based procurement (VBP) programs impacting pricing. Outside China, the diagnostics business grew by 7%. Abbott is focusing on improving performance in other geographies and exploring M&A opportunities to support growth. The company is also expanding its portfolio in the blood bank business with new nucleic acid testing systems.

Q: What are the key drivers for Abbott's expected acceleration in organic growth in the second half of 2025? A: Robert Ford, CEO, indicated that new product launches, including the Volt PFA system, and improved comps in diagnostics and nutrition are expected to drive growth. The company anticipates better performance in the second half due to the ramp-up of recently launched products and recovery in its international nutrition business.

Q: Can you provide an update on Abbott's Rhythm Management business and the rollout of the AVEIR product? A: Robert Ford, CEO, highlighted the strong performance of the Rhythm Management business, driven by the AVEIR leadless pacemaker. The company has expanded its accounts and increased physician training, leading to a significant increase in implants. Abbott is also developing next-generation leadless products to further enhance its market position.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.