Abbott Laboratories (ABT) stock plummeted 8% after the company delivered solid second-quarter earnings but disappointed investors with its forward guidance. Revenue rose 7.4% to $11.14 billion, beating the consensus estimate of $11.07 billion. Organic sales growth, excluding Covid testing results, increased 7.5%, outpacing the 7.2% estimate.
The company’s medical devices segment was a standout, driven by strong growth in Diabetes Care and double-digit growth in Heart Failure. Established Pharmaceutical sales also exceeded expectations, reaching over $1 billion in quarterly sales for the first time across its 15 key emerging markets.
However, Abbott’s failure to increase its full-year earnings guidance and a third-quarter earnings guide that came in below consensus estimates sent the stock down. The company also missed estimates on its Diagnostics segment, which was largely impacted by falling Covid testing sales in China.
CEO Robert Ford attributed the disappointing results to strong underlying demand for core lab diagnostics outside of China, but acknowledged that sluggish Diagnostics sales were a concern. Abbott’s litigation concerns over its specialized infant formula for premature infants are ongoing, with the company defending its product against allegations of failing to properly warn patients about the risks of necrotizing enterocolitis.
Investors are now waiting for CEO Robert Ford’s discussion on Thursday’s edition of “Mad Money” to better understand the issues pressuring management’s outlook and when things may improve. The analyst rating remains unchanged, with a $145-per-share price target.
Source: https://www.cnbc.com/2025/07/17/abbott-stock-fell-victim-to-an-old-earnings-season-truth-its-all-about-the-guidance.html