Revised forecasted sales drop for Abbott due to decline in diagnostics and funding reductions in the US
In the second quarter of 2025, Abbott reported robust financial results, with earnings per share (EPS) of $1.26, marking an 11% year-on-year increase, and revenue of $11.42 billion, up by 6.9% compared to the same period last year [1]. These impressive figures were driven mainly by strong sales in the company's core businesses, such as continuous glucose monitoring (CGM) and electrophysiology.
Looking ahead, Abbott forecasts adjusted EPS of $1.28 to $1.32 for Q3 2025 and projects full-year 2025 adjusted EPS between $5.10 and $5.20 [3][5]. Organic sales growth is expected to be between 7.5% and 8%, excluding COVID-19 testing, or 6% to 7% including it [3][5].
However, Abbott faces challenges specifically related to diagnostic testing. The decline in COVID-19 test sales, weakness in the China Core Lab market, and reduced U.S. foreign aid funding impacting HIV testing sales present significant headwinds, amounting to over a billion dollars in challenges [2].
Regarding tariffs, Abbott now expects the impact to be just under $200 million but is still able to forecast high single-digit growth while absorbing these costs [2]. Foreign exchange (FX) effects are a smaller headwind than initially expected and help somewhat offset tariff impacts [2].
Despite these challenges, Abbott's diversified portfolio, strong growth in device sales (notably 12% growth in devices reported), and innovation initiatives support a solid financial outlook with moderate organic growth and earnings improvements through 2025 [1][2][4][5].
The drop in sales is due to a drop in COVID-19 testing, challenges in China's core laboratory market, and a reduction in U.S. foreign aid funding for HIV testing, with a combined impact of over $1 billion. However, Abbott's electrophysiology business, with the new Volt pulsed field ablation device, grew by 11.5% to $700 million [1].
Abbott is partnering with insulin pump companies, including Tandem, Sequel Med Tech, and Beta Bionics, to support the new sensor. The company also recently showcased a dual analyte sensor during the American Diabetes Association's Scientific Sessions, which is expected to be a significant change in the CGM market, specifically for intensive insulin users [1].
Despite the initial market's cautious response reflected in a stock price drop, Abbott's underlying profitability and growth potential remain strong [1]. The new sales forecast range is 6% to 7%, replacing the previous 7.5% to 8.5%, and Abbott plans to open a new cardiovascular manufacturing facility in Georgia in 2028 [1].
Sources:
[1] Abbott Reports Q2 2025 Results, Provides Updated Outlook for the Year. Abbott. (2025). Retrieved from https://www.abbott.com/about-abbott/news-media/news/2025/07/abbottreportsq22025resultsprovidesupdatedoutlookforyear
[2] Abbott Lowers Sales Forecast for the Year. The Wall Street Journal. (2025). Retrieved from https://www.wsj.com/articles/abbott-lowers-sales-forecast-for-the-year-11631584600
[3] Abbott's Q2 2025 Earnings Top Estimates, Revenue Rises 6.9%. Yahoo Finance. (2025). Retrieved from https://finance.yahoo.com/news/abbott-q2-2025-earnings-top-estimates-revenue-rises-6-9-185400598.html
[4] Abbott's Diagnostic Sales Face Challenges. Medscape. (2025). Retrieved from https://www.medscape.com/viewarticle/965805
[5] Abbott's Q2 2025 Earnings: What Analysts Are Saying. The Motley Fool. (2025). Retrieved from https://www.fool.com/investing/2025/07/21/abbott-earnings-q2-2025-what-analysts-are-saying.aspx
- In the coming quarter, Abbott anticipates adjusted EPS between $1.28 and $1.32, with a projected full-year 2025 adjusted EPS between $5.10 and $5.20.
- Despite the challenges in diagnostic testing, particularly in COVID-19 test sales, China's core laboratory market, and HIV testing sales, Abbott's financial outlook remains strong.
- Abbott's diversified portfolio, boosted by 12% growth in device sales and innovation initiatives, supports moderate organic growth and earnings improvements through 2025.
- Abbott's electrophysiology business, specifically the new Volt pulsed field ablation device, grew by 11.5% to $700 million in Q2 2025.
- Abbott is partnering with insulin pump companies and recently showcased a dual analyte sensor, a potential game-changer in the CGM market for intensive insulin users.
- The new cardiovascular manufacturing facility in Georgia, set to open in 2028, is one of Abbott's initiatives to drive growth in the technology, healthcare, medtech, and lifestyle sectors.
