TLDR
- Q1 2025 adjusted EPS hit $1.09, beating expectations by 2 cents
- Medical Devices revenue rose 12.5%, with diabetes care a standout
- Nutrition segment saw 7% sales growth, led by U.S. pediatric nutrition
- Diagnostics sales dropped 5% due to lower COVID testing volumes
- Abbott plans $500M investment in new facilities in Texas and Illinois
Abbott Laboratories delivered a strong Q1 2025 performance, reporting revenue of $10.36 billion, a 7.2% increase year-over-year. Excluding COVID-19 testing, organic sales growth was 8.3%. The company reported adjusted earnings per share of $1.09, beating both Wall Street expectations and internal guidance.
Gross margin reached 57.1%, up 140 basis points from the previous year. Operating margin also improved, rising 130 basis points to 21%. These margin gains reflected better product mix and operational efficiency across the company’s diversified portfolio.
Medical Devices lead the charge
The standout segment this quarter was Medical Devices, which posted 12.5% sales growth. Diabetes care, particularly continuous glucose monitors (CGMs), saw over 20% growth. Sales of FreeStyle Libre reached $1.7 billion, up 21.6% on an organic basis.
Electrophysiology, Structural Heart, and Heart Failure devices also contributed meaningfully. New products like Navitor, TriClip, and AVEIR have helped Abbott maintain momentum across its cardiovascular portfolio.
Nutrition sees balanced growth
Nutrition sales increased 7%, driven by double-digit growth in U.S. pediatric nutrition and strong adult nutrition sales. Products like Ensure and Glucerna supported an 8.7% organic increase in adult nutrition.
Pediatric nutrition posted 4.9% organic growth, as Abbott continues to recover from past supply issues. The company appears well-positioned to meet both domestic and international demand in this segment.
Diagnostics pressured by COVID test decline
Not all segments performed equally well. Diagnostics sales fell 5%, largely due to the year-over-year drop in COVID-19 testing revenue. Core Laboratory Diagnostics was also affected by volume-based procurement programs in China, limiting growth despite stable organic trends.
When excluding COVID-related sales, the Diagnostics segment still saw modest growth, but it remains a drag on overall performance.
$500 million U.S. investment boosts sentiment
Investors welcomed Abbott’s announcement of a $500 million investment in new manufacturing and R&D facilities in Illinois and Texas. These facilities are expected to open later this year, adding 300 new jobs. The move reflects Abbott’s long-term strategy to boost U.S.-based operations while reinforcing supply chain resilience.
Shares of Abbott rose nearly 5% after the news, putting the stock among the S&P 500’s top performers for the day.
Outlook holds despite tariff concerns
Abbott reaffirmed its full-year adjusted EPS guidance of $5.05 to $5.25, slightly above the consensus of $5.15. Second-quarter EPS is projected between $1.23 and $1.27. CEO Robert Ford noted that the company had considered raising guidance but held back due to new tariff policies that could cost several hundred million dollars in 2025.
The company’s ability to grow EPS and maintain guidance during an uncertain policy environment speaks to the strength of its diversified model. Abbott remains on track to launch more than 25 new products over the next three years, signaling continued innovation and future upside potential.
