Abbott(US:ABT)2025-10-29 20:22Financial Performance - Total net sales increased by 6.9% in Q3 2025 compared to Q3 2024, reaching $11.369 billion, with a 5.5% increase excluding foreign exchange impact [95][97]. - Total net sales for the first nine months of 2025 increased by 6.4% to $32.869 billion, with a 6.1% increase excluding foreign exchange [95][98]. - Gross profit margin improved to 51.7% in Q3 2025, compared to 51.4% in Q3 2024, and 52.4% for the first nine months of 2025, up from 51.0% in the prior year [105]. Segment Performance - Medical Devices segment saw a significant sales increase of 14.8% in Q3 2025, totaling $5.448 billion, driven by strong demand for Diabetes Care products [95][97]. - Established Pharmaceutical Products sales rose by 7.5% in Q3 2025, amounting to $1.511 billion, with a 7.1% increase excluding foreign exchange [95][97]. - Diagnostic Products sales decreased by 6.6% in Q3 2025, totaling $2.253 billion, primarily due to declining COVID-19 testing-related sales [95][97]. - COVID-19 testing-related sales were $69 million in Q3 2025, down from $265 million in Q3 2024, reflecting a significant decline in demand [97][98]. Expenses - Research and development expenses increased by 7.5% to $766 million in Q3 2025, and by 5.4% to $2.2 billion in the first nine months of 2025 [106]. - Selling, general, and administrative expenses rose by 5.4% to $3.1 billion in Q3 2025, and by 4.7% to $9.2 billion in the first nine months of 2025 [107]. - Abbott recorded $197 million in employee-related severance and other charges in the first nine months of 2025 as part of restructuring plans [108]. Cash Flow and Working Capital - Net cash from operating activities for the first nine months of 2025 totaled $6.3 billion, an increase of $561 million from the prior year, driven by higher segment operating earnings [118]. - Working capital increased to $10.3 billion at September 30, 2025, up from $9.5 billion at December 31, 2024, primarily due to increases in trade receivables and inventory [117]. Shareholder Returns - Abbott repurchased 2.4 million common shares for $303 million in Q3 2025, utilizing the remaining authorization under the December 2021 share repurchase program [120]. - Abbott declared a quarterly dividend of $0.59 per share in each of the first three quarters of 2025, representing a 7.3% increase over the $0.55 per share dividend in the same period of 2024 [121]. Debt and Ratings - Interest expense decreased by $7 million to $44 million in Q3 2025 and by $27 million to $143 million in the first nine months of 2025, primarily due to long-term debt repayment [110]. - Abbott's long-term debt rating was AA- by S&P Global Ratings and Aa3 by Moody's Investors Service as of September 30, 2025 [119]. - Abbott's cash and cash equivalents decreased from $7.6 billion at December 31, 2024, to $7.5 billion at September 30, 2025, reflecting debt repayments and dividend payments [117]. Tax Matters - Taxes on earnings for the first nine months of 2025 included approximately $460 million related to a deferred tax asset recognized as a significant non-cash tax benefit in a prior year [111]. - Abbott intends to vigorously defend its tax positions against the IRS, including contesting a Statutory Notice of Deficiency for $417 million related to the 2019 tax year [112][114]. - The OECD's proposed two-pillared plan for a revised international tax system is being monitored by Abbott, with no material impact projected on its consolidated financial statements [116].