Abbott(US:ABT)2025-07-30 20:14Sales Performance - Total net sales increased by 7.4% to $11,142 million in Q2 2025 compared to $10,377 million in Q2 2024, with a 6.9% increase excluding foreign exchange impact [94]. - Medical Devices segment saw a 13.4% increase in sales to $5,369 million in Q2 2025, driven by strong performance in Diabetes Care and other product lines [94]. - Established Pharmaceutical Products sales rose by 6.9% to $1,383 million in Q2 2025, with a 7.7% increase excluding foreign exchange impact [94]. - Diagnostic Products sales decreased by 1.0% to $2,173 million in Q2 2025, impacted by declining COVID-19 testing-related sales [94]. - Abbott's total international sales increased by 6.6% to $6,866 million in Q2 2025, with a 0.8% positive impact from foreign exchange [94]. - COVID-19 testing-related sales were $55 million in Q2 2025, down from $102 million in Q2 2024, reflecting reduced demand [96]. Expenses - Research and development (R&D) expenses increased by 3.9% to $725 million in Q2 2025, reflecting higher spending on various projects [106]. - Selling, general, and administrative (SG&A) expenses rose by 5.3% to $3.1 billion in Q2 2025, driven by increased marketing spending [107]. Profitability - Gross profit margin improved to 52.7% in Q2 2025, up from 51.1% in Q2 2024, due to gross margin improvement initiatives [105]. Cash Flow and Financial Position - Net cash from operating activities for the first six months of 2025 totaled $3.5 billion, an increase of $479 million from the prior year [118]. - As of June 30, 2025, cash and cash equivalents decreased from $7.6 billion to $7.0 billion, reflecting a $1.0 billion debt repayment and dividend payments [117]. - Working capital increased to $11.0 billion at June 30, 2025, up from $9.5 billion at December 31, 2024, primarily due to increases in inventory and trade receivables [117]. Taxation and Legal Matters - In the first six months of 2025, taxes on earnings included $84 million in excess tax benefits associated with share-based compensation and approximately $300 million of tax expense related to a deferred tax asset [111]. - Abbott received a Statutory Notice of Deficiency from the IRS for the 2019 Federal tax year amounting to $417 million, primarily related to income reallocation adjustments [112]. - Abbott intends to vigorously defend its tax positions through discussions with the IRS and litigation as necessary [115]. - Abbott continues to monitor developments related to the OECD's proposed international tax system, which is not projected to materially impact its consolidated financial statements [116]. Shareholder Returns - Abbott declared a quarterly dividend of $0.59 per share in the first two quarters of 2025, representing a 7.3% increase over the $0.55 per share dividend in the same period of 2024 [121]. - The company has authorized a share repurchase program of up to $7 billion, in addition to the $293 million unused portion from a previous program [120]. Debt and Credit Ratings - Abbott's long-term debt rating was AA- by S&P Global Ratings and Aa3 by Moody's Investors Service as of June 30, 2025 [119]. - Abbott recorded $104 million in employee-related severance and other charges in the first six months of 2025 as part of restructuring plans [108].