Abbott Laboratories Faces Tariff Costs While Achieving Strong Growth in Diabetes Products

On April 17, 2025, Abbott Laboratories reported impressive first-quarter earnings that defied a broader market selloff, predominantly driven by robust demand for its diabetes care products. The Chicago-based medical-device company, which operates 90 manufacturing sites globally, disclosed anticipated costs stemming from tariffs that it expects to affect its financial performance starting in the third quarter.

Financial Highlights and Earnings Performance

Chief Executive Robert Ford noted during a post-earnings call that Abbott expects tariffs to contribute to costs amounting to “a few hundred million dollars” in 2025, primarily in the latter half of the year. Interestingly, Ford indicated that there will be no tariff-related costs expected in the upcoming second quarter.

Despite the looming tariff implications, Abbott’s stock (ABT) gained 3% in afternoon trading, making it one of the few stocks in the green amid fluctuating market conditions. The recent earnings report revealed that first-quarter sales for diabetes-care products rose by a remarkable 16.5% year-over-year, reaching $1.83 billion, bolstered by an 18.3% increase in continuous glucose monitor sales.

Growing Demand Amid Rising Diabetes Rates

The positive sales trajectory underscores the increasing prevalence of diabetes globally, with data indicating that over 800 million adults have been diagnosed with the condition. This number is a fourfold increase since 1990, aligning with warnings from the World Health Organization, which has called for urgent initiatives to address this health crisis.

Abbott’s comprehensive strategy within its diabetes product line has paid off significantly, contributing to a 9.9% growth in overall medical device sales, totaling $4.9 billion—slightly exceeding the average analyst estimate of $4.86 billion per FactSet.

Quarterly Earnings Exceed Analyst Expectations

Abbott’s net earnings for the first quarter of 2025 rose to $1.33 billion, translating to 76 cents per share, an increase from $1.23 billion or 70 cents per share in the same quarter last year. When adjusted for nonrecurring items, earnings per share (EPS) reached $1.09, surpassing the FactSet consensus of $1.07. This marked the 21st consecutive quarter in which Abbott has exceeded EPS expectations, based on available data.

Overall revenue for Abbott rose by 4% year-over-year to $10.36 billion, although this fell short of the expected $10.41 billion. Notably, this marked the second consecutive quarter in which sales missed analyst forecasts after an impressive 14-quarter streak of exceeding expectations.

Segment Performance Overview

In its nutrition division, Abbott recorded sales of $2.146 billion, reflecting a 3.8% increase compared to the previous year. Adult nutrition products, particularly the Ensure and Glucerna brands, led the charge with a 4.4% increase in sales.

On the diagnostic front, Abbott’s sales were $2.054 billion, which represented a decrease of 7.2% year-over-year. The company attributed this decline to reduced COVID-19 testing volume and challenges related to volume-based procurement in China.

Future Outlook and Guidance

Despite the challenges posed by tariffs and a slight slowdown in diagnostics sales, Abbott has reiterated its full-year financial guidance. The company anticipates organic sales growth for 2025 to range between 7.5% and 8.5% and adjusted earnings to be in the range of $5.05 to $5.25 per share. For the second quarter, Abbott expects adjusted earnings between $1.23 and $1.27 per share, in line with analysts’ expectations averaging around $1.25 per share.

Conclusion

As Abbott Laboratories continues to navigate a challenging landscape marked by external tariff pressures, its strong demand for diabetes care products positions the company favorably for future growth. The ongoing surge in diabetes prevalence presents both challenges and opportunities, and Abbott’s strategic focus on addressing medical needs is a critical component of its success in today’s dynamic market environment.

With a proven track record of strong financial performance and a commitment to innovation in healthcare, Abbott Laboratories is well-positioned to tackle both its immediate challenges and capitalize on long-term growth prospects.

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Abbott Laboratories Thrives Amid Tariff Challenges with Impressive Growth in Diabetes Products