Abbott(ABT) - 2025 Q2 - Quarterly Results

Abbott Q2 2025 Financial Highlights & Outlook Abbott delivered strong Q2 2025 results with high single-digit organic sales growth, double-digit EPS growth, and raised full-year guidance Second-Quarter 2025 Performance Summary Abbott achieved strong Q2 results with high single-digit organic sales growth, double-digit EPS growth, and significant margin expansion Q2 2025 Key Financial Metrics | Metric | Value | Growth vs. Prior Year | | :--- | :--- | :--- | | Reported Sales Growth | 7.4% | - | | Organic Sales Growth | 6.9% | - | | Organic Sales Growth (Ex-COVID) | 7.5% | - | | GAAP Diluted EPS | $1.01 | - | | Adjusted Diluted EPS | $1.26 | Double-digit growth | Q2 2025 Margin Performance | Margin Type | Reported | Adjusted | Basis Point Increase (Adjusted) | | :--- | :--- | :--- | :--- | | Gross Margin | 52.7% | 57.0% | 100 bps | | Operating Margin | 18.4% | 22.9% | 100 bps | - Key strategic advancements in the quarter include: - Completed enrollment ahead of schedule for the FlexPulse U.S. IDE trial for treating atrial fibrillation (AFib) - Announced positive late-breaking data from the AVEIR Conduction System Pacing (CSP) clinical feasibility study for a leadless pacemaker - Received FDA approval for the Tendyne transcatheter mitral valve replacement (TMVR) system - Initiated plans to develop a new cardiovascular device manufacturing facility in Georgia, to be completed by 2028[3] Full-Year 2025 Financial Guidance Abbott raised its full-year 2025 guidance, projecting strong organic sales growth and double-digit adjusted diluted EPS Full-Year 2025 Projections | Metric | Projected Range | | :--- | :--- | | Organic Sales Growth (Ex-COVID) | 7.5% to 8.0% | | Organic Sales Growth (Incl. COVID) | 6.0% to 7.0% | | Adjusted Operating Margin | ~23.5% of sales | | Adjusted Diluted EPS | $5.10 to $5.20 | - The company projects third-quarter 2025 adjusted diluted earnings per share to be in the range of $1.28 to $1.32[20] Quarterly Dividend Announcement Abbott declared its 406th consecutive quarterly dividend, extending its 53-year track record of dividend increases - A quarterly dividend of $0.59 per share was declared, payable on August 15, 2025, to shareholders of record on July 15, 2025[22] - Abbott has increased its dividend for 53 consecutive years and is a member of the S&P 500 Dividend Aristocrats Index[22] Business Segment Performance This section details Q2 2025 performance across Abbott's Nutrition, Diagnostics, Established Pharmaceuticals, and Medical Devices segments Nutrition The Nutrition segment reported Q2 sales growth driven by strong Adult Nutrition performance, particularly Ensure and Glucerna brands Nutrition Sales Performance (Q2 2025 vs. Q2 2024) | Category | Total Reported Sales ($M) | Reported Growth | Organic Growth | | :--- | :--- | :--- | :--- | | Total Nutrition | $2,212 | 2.9% | 3.4% | | Pediatric | $1,054 | (0.4%) | 0.2% | | Adult | $1,158 | 6.1% | 6.6% | - Growth was led by the Adult Nutrition portfolio, particularly the Ensure and Glucerna brands[10] Diagnostics The Diagnostics segment experienced a Q2 sales decrease primarily due to declining COVID-19 testing sales, despite slight organic growth excluding these tests Diagnostics Sales Performance (Q2 2025 vs. Q2 2024) | Category | Total Reported Sales ($M) | Reported Growth | Organic Growth | | :--- | :--- | :--- | :--- | | Total Diagnostics | $2,173 | (1.0%) | (1.4%) | | Core Laboratory | $1,358 | 2.2% | 1.6% | | Molecular | $123 | (2.7%) | (3.4%) | | Point of Care | $148 | (5.1%) | (5.2%) | | Rapid Diagnostics | $544 | (6.7%) | (6.8%) | - COVID-19 testing-related sales were $55 million in Q2 2025, compared to $102 million in Q2 2024[12] - Excluding COVID-19 testing sales, global Diagnostics organic sales increased by 0.8%[11] Established Pharmaceuticals The Established Pharmaceuticals segment achieved strong Q2 growth, primarily driven by double-digit organic sales increases in Key Emerging Markets Established Pharmaceuticals Sales Performance (Q2 2025 vs. Q2 2024) | Category | Total Reported Sales ($M) | Reported Growth | Organic Growth | | :--- | :--- | :--- | :--- | | Total | $1,383 | 6.9% | 7.7% | | Key Emerging Markets | $1,059 | 7.3% | 8.7% | | Other | $324 | 5.9% | 4.5% | - Sales in Key Emerging Markets were led by double-digit growth in several countries across Asia, Latin America and the Middle East[15] Medical Devices The Medical Devices segment delivered outstanding Q2 performance with broad-based double-digit organic sales growth, led by Diabetes Care Medical Devices Sales Performance (Q2 2025 vs. Q2 2024) | Category | Total Reported Sales ($M) | Reported Growth | Organic Growth | | :--- | :--- | :--- | :--- | | Total Medical Devices | $5,369 | 13.4% | 12.2% | | Diabetes Care | $1,981 | 20.2% | 18.5% | | Electrophysiology | $700 | 11.5% | 10.3% | | Heart Failure | $368 | 14.7% | 14.0% | | Structural Heart | $636 | 13.0% | 11.7% | | Rhythm Management | $673 | 10.9% | 9.8% | - Sales of continuous glucose monitors (including FreeStyle Libre) were $1.9 billion, growing 21.4% reported and 19.6% organically[18] - Strong performance was driven by several products, including FreeStyle Libre, Navitor, TriClip, and AVEIR[18] Consolidated Financial Statements This section presents Abbott's condensed consolidated statements of earnings for Q2 and the first half of 2025 Condensed Consolidated Statement of Earnings (Q2 2025) Abbott reported Q2 2025 net sales of $11.142 billion, with significant increases in operating earnings and net earnings Q2 2025 Statement of Earnings Highlights (in millions, except per share data) | Metric | 2Q25 | 2Q24 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $11,142 | $10,377 | 7.4% | | Operating Earnings | $2,052 | $1,669 | 23.0% | | Net Earnings | $1,779 | $1,302 | 36.7% | | Diluted EPS | $1.01 | $0.74 | 36.5% | | Adjusted Net Earnings | $2,213 | $2,003 | 10.5% | | Adjusted Diluted EPS | $1.26 | $1.14 | 10.5% | Condensed Consolidated Statement of Earnings (First Half 2025) For the first half of 2025, net sales reached $21.500 billion, with strong growth in operating and net earnings First Half 2025 Statement of Earnings Highlights (in millions, except per share data) | Metric | 1H25 | 1H24 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $21,500 | $20,341 | 5.7% | | Operating Earnings | $3,745 | $3,055 | 22.6% | | Net Earnings | $3,104 | $2,527 | 22.9% | | Diluted EPS | $1.77 | $1.44 | 22.9% | | Adjusted Net Earnings | $4,132 | $3,732 | 10.7% | | Adjusted Diluted EPS | $2.35 | $2.12 | 10.8% | Non-GAAP Reconciliations This section provides reconciliations from GAAP to non-GAAP financial measures, including earnings, tax rates, and revenue adjustments Reconciliation of Financial Information This section reconciles GAAP to non-GAAP financial measures for Q2 and H1 2025, detailing the impact of specified item exclusions Q2 2025 GAAP to Non-GAAP Reconciliation (in millions, except per share) | Metric | As Reported (GAAP) | Specified Items | As Adjusted (Non-GAAP) | | :--- | :--- | :--- | :--- | | Net Earnings | $1,779 | $434 | $2,213 | | Diluted EPS | $1.01 | $0.25 | $1.26 | H1 2025 GAAP to Non-GAAP Reconciliation (in millions, except per share) | Metric | As Reported (GAAP) | Specified Items | As Adjusted (Non-GAAP) | | :--- | :--- | :--- | :--- | | Net Earnings | $3,104 | $1,028 | $4,132 | | Diluted EPS | $1.77 | $0.58 | $2.35 | Reconciliation of Tax Rates This section reconciles GAAP to non-GAAP tax rates for Q2 and H1 2025, showing adjustments after excluding specified items Q2 2025 Tax Rate Reconciliation | Basis | Pre-Tax Income ($M) | Taxes on Earnings ($M) | Tax Rate | | :--- | :--- | :--- | :--- | | As reported (GAAP) | $2,150 | $371 | 17.3% | | Excluding specified items | $2,650 | $437 | 16.5% | H1 2025 Tax Rate Reconciliation | Basis | Pre-Tax Income ($M) | Taxes on Earnings ($M) | Tax Rate | | :--- | :--- | :--- | :--- | | As reported (GAAP) | $3,928 | $824 | 21.0% | | Excluding specified items | $4,948 | $816 | 16.5% | Non-GAAP Revenue Reconciliation This reconciliation adjusts H1 2024 revenue for the ZonePerfect discontinuation, providing a comparable organic growth rate for H1 2025 - The reconciliation adjusts for the impact of discontinuing the ZonePerfect product line in the Nutrition business in March 2024[50] H1 2025 Total Company Revenue Reconciliation | Metric | Value | | :--- | :--- | | Reported Growth | 5.7% | | Adjusted Growth | 5.8% | | Organic Growth | 6.9% | Details of Specified Items This section details the specified items excluded from non-GAAP results, primarily intangible amortization and restructuring costs Details of Specified Items - Q2 2025 (in millions) | Category | Gross Margin | R&D | SG&A | Total Before Tax | | :--- | :--- | :--- | :--- | :--- | | Intangible Amortization | $420 | - | - | $420 | | Restructuring & Cost Reduction | $55 | $(7) | $1 | $61 | | Acquisition-related | $1 | - | $(3) | $5 | | Other | $2 | $(13) | $1 | $14 | | Total | $478 | $(20) | $(1) | $500 | - Specified items for Q2 2025 include costs for restructuring, acquisitions, and compliance with European medical device regulations (MDR/IVDR)[52][53]