01—Abstract
Summary
Summary of the 8-K filed July 17, 2025. Cited figures are marked; the original filing is the authoritative source.
Abbott Laboratories reported second-quarter 2025 results on July 17, 2025, with reported sales of $11.14 billiona, up 7.4% year over year, and organic growth of 6.9% (7.5% excluding COVID-19 testing sales).
Growth was broad-based, led by Medical Devices (+13.4% reported, +12.2% organic), with Diabetes Care (+20.2% reported, driven by continuous glucose monitors at $1.9 billionb, up 21.4%), Heart Failure, Structural Heart and Electrophysiology posting double-digit gains. Nutrition grew 2.9% reported, and Diagnostics declined 1.0% reported (-1.4% organic) due to lower COVID-19 testing sales and China volume-based procurement, though ex-COVID tests Diagnostics grew 0.8%. Established Pharmaceuticals rose 6.9%.
Profitability improved markedly. GAAP diluted EPS was $1.01c, up 36.5%, while adjusted diluted EPS was $1.26, up 10.5% from $1.14. Reported gross margin reached 52.7% and adjusted gross margin 57.0%, each up about 100 basis points; adjusted operating margin was 22.9%.
GAAP net earnings were helped by roughly $90 milliond of tax benefits from prior-year tax position resolutions, partly offset by about $100 million of adjustments related to a previously recognized non-cash deferred tax benefit. Intangible amortization fell 10.7% to $420 million. Management raised the low end of its guidance framework and reaffirmed its outlook: full-year 2025 organic sales growth of 7.5% to 8.0% excluding COVID-19 testing (6.0% to 7.0% including it), adjusted diluted EPS of $5.10 to $5.20, and an adjusted operating margin of about 23.5%.
Q3 adjusted EPS is guided to $1.28 to $1.32. The company also declared its 406th consecutive quarterly dividend of $0.59 per share, payable August 15, 2025, and announced a new cardiovascular manufacturing facility in Georgia to be completed by 2028.
02—Key points
Key Highlights
- Q2 2025 reported sales of $11.142 billion, up 7.4%; organic growth of 6.9%, or 7.5% excluding COVID-19 testing sales
- GAAP diluted EPS of $1.01 (up 36.5%); adjusted diluted EPS of $1.26 (up 10.5%), with adjusted gross margin of 57.0% and adjusted operating margin of 22.9%, each reflecting roughly 100 bps of expansion
- Medical Devices led growth at 13.4% reported (12.2% organic), with Diabetes Care up 20.2% and CGM sales of $1.9 billion
- Diagnostics declined 1.0% reported amid lower COVID-19 testing ($55M vs. $102M) and China volume-based procurement; ex-COVID sales grew 0.8%
- Reaffirmed 2025 adjusted EPS guidance of $5.10 to $5.20 and organic growth guidance of 7.5% to 8.0% excluding COVID-19 testing (6.0% to 7.0% including it)
- GAAP tax rate of 17.3% in Q2 was flattered by about $90M of prior-year tax resolutions, partly offset by about $100M of deferred tax benefit adjustments; the adjusted tax rate was 16.5%
- Declared 406th consecutive quarterly dividend of $0.59 per share and 53 consecutive years of dividend increases
03—Questions
Frequently Asked Questions
Did Abbott meet its growth expectations in Q2 2025?
Abbott delivered 6.9% organic sales growth (7.5% excluding COVID-19 testing) and adjusted EPS of $1.26, up 10.5%. It maintained full-year guidance rather than raising it, which suggests management views the first half as on track rather than ahead of plan. Investors should note that the GAAP EPS growth of 36.5% is inflated by one-time tax benefits and lower amortization, so adjusted figures are the better guide to operating performance.
What is driving Abbott's strong growth?
Medical Devices is the main engine, growing 13.4% reported, with Diabetes Care (FreeStyle Libre CGMs), Heart Failure, Structural Heart (TriClip, Navitor) and Electrophysiology all in double digits. Nutrition grew a more modest 2.9%, led by Adult Nutrition (Ensure, Glucerna), while Diagnostics was a drag due to COVID-19 testing declines and China pricing pressure.
Why does the GAAP EPS differ so much from adjusted EPS?
The gap comes from specified items totaling $434 million after tax in Q2 2025 (about $0.25 per share). The largest item is $420 million of intangible amortization. The rest reflects restructuring and cost reduction charges, acquisition-related costs and other expenses. Abbott does not provide GAAP guidance for these items because their timing and size are hard to forecast.
Is the dividend at risk?
No sign of risk appears in this filing. Abbott declared a $0.59 quarterly dividend payable August 15, 2025, its 406th consecutive quarterly payment, and has increased the dividend for 53 straight years. It is a member of the S&P 500 Dividend Aristocrats Index. Earnings coverage is supported by adjusted EPS of $1.26 in the quarter.
What are the key risks or watch items from this report?
Diagnostics is shrinking on a reported basis, and China volume-based procurement is pressuring core lab results. The full-year guidance range is wide, with organic growth of 6.0% to 7.0% if COVID-19 testing is included, and the Q2 GAAP tax rate was affected by one-time items and a previously recognized deferred tax benefit that may be adjusted again. Investors should also track the timing of new product launches such as the TactiFlex Duo PFA system and the Tendyne TMVR approval.
04—Continue