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ABBOTT LABORATORIES (ABT)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 was solid: revenue $11.37B (+6.9% reported; +7.5% organic ex‑COVID) and adjusted EPS $1.30; EPS was in line with consensus and revenue was essentially in line, reflecting broad-based strength in Medical Devices and resilient EPD, offset by Diagnostics headwinds in China .
  • Medical Devices drove the quarter with double‑digit growth across Diabetes Care, Electrophysiology, Rhythm Management, Heart Failure, and Structural Heart; FreeStyle Libre CGM sales reached $2.0B (+17.2% organic) .
  • Abbott reaffirmed FY25 organic sales guidance and narrowed FY25 adjusted EPS guidance to $5.12–$5.18 (double‑digit growth at midpoint), and declared a $0.59 quarterly dividend (407th consecutive) .
  • Key catalysts: structural heart approvals (TriClip in Japan; Navitor CE Mark expanded indication), EP PFA “Volt” ramp OUS with US expected next year, and CRM momentum from AVEIR leadless pacemakers; management signaled Diagnostics headwinds should lap by Q4 and ease in 2026 .

What Went Well and What Went Wrong

What Went Well

  • Devices-led growth: “sales grew 12.5% driven by double-digit growth in diabetes care, electrophysiology, cardiac rhythm management, heart failure and structural heart” .
  • Libre strength: CGM sales $2.0B; management remains “very bullish on the basal segment…only ~20% penetrated in the U.S.” with additional sensor launches to drive penetration .
  • Strategic approvals: TriClip approval in Japan and Navitor expanded CE Mark broaden treatment options and support share gains in TAVR/TEER; ESC guidelines upgraded TEER for mitral and tricuspid valves .
  • Quote: “Recently launched new products generated nearly $500 million in sales this quarter and added more than 100 basis points to organic sales growth” – Robert Ford .

What Went Wrong

  • Diagnostics headwinds: Global Diagnostics -7.8% organic; China VBP and DRG changes pressured core lab pricing and volumes; COVID testing declined to $69M from $265M YoY .
  • Nutrition U.S. pediatric softness: share given back post competitor supply recovery; one large WIC contract loss impacted the quarter, though two new WIC wins start in Q1/Q2 2026 .
  • Tariffs compressed gross margin: adjusted gross margin 55.8% of sales in Q3 (down sequentially), with tariff burden first meaningfully felt in Q3; mitigation underway .

Financial Results

Revenue and EPS across recent periods

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Billions)$10.36 $11.14 $11.37
Adjusted Diluted EPS ($)$1.09 $1.26 $1.30
GAAP Diluted EPS ($)$0.76 $1.01 $0.94

Q3 2025 vs prior year and estimates

MetricQ3 2024Q3 2025 ActualQ3 2025 Consensus*Beat/(Miss)
Revenue ($USD Billions)$10.64 $11.37 $11.39*($0.02)B*
Adjusted Diluted EPS ($)$1.21 $1.30 $1.30*$0.00*

Values retrieved from S&P Global.*

Margins

MetricQ2 2025Q3 2025
Adjusted Gross Margin %57.0% 55.8%
Adjusted Operating Margin %22.9% 23.0%

Segment breakdown – Q3 2025

Segment Sales ($USD Millions)U.S.InternationalTotalYoY Reported %Organic %
Rhythm Management350 336 686 +15.0% +13.0%
Electrophysiology322 383 705 +15.6% +13.7%
Heart Failure280 86 366 +13.3% +12.1%
Vascular280 465 745 +6.6% +4.7%
Structural Heart297 338 635 +13.6% +11.3%
Neuromodulation196 58 254 +7.6% +6.8%
Diabetes Care796 1,261 2,057 +19.3% +16.2%
Diagnostics (Total)886 1,367 2,253 (6.6%) (7.8%)
EPD (Total)—1,511 1,511 +7.5% +7.1%
Nutrition (Total)888 1,265 2,153 +4.2% +4.0%

KPIs

KPIQ3 2025Trend
FreeStyle Libre CGM sales ($USD Billions)$2.0 Higher vs Q2 ($1.9B)
Diagnostics COVID testing sales ($USD Millions)$69 Down vs Q3 2024 ($265M)
Core Lab Diagnostics YoY growth (reported / organic)+3.8% / +2.2% Improving ex‑China
EPD Key Emerging Markets YoY growth (organic)+11.1% Broad-based strength
FX impact on Q3 reported sales+1.4% Slightly less favorable than forecast
Adjusted tax rate (Q3, excl. specified items)16.5% In line with profile
AVEIR penetration (single / dual chamber)~50% / <10% (U.S.) Expanding footprint

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Organic Sales Growth (ex‑COVID)FY 20257.5%–8.0% 7.5%–8.0% Maintained
Organic Sales Growth (incl. COVID)FY 20256.0%–7.0% 6.0%–7.0% Maintained
Adjusted Diluted EPSFY 2025$5.10–$5.20 $5.12–$5.18 Narrowed (midpoint maintained)
Dividend per share (quarterly)Q4 2025$0.59 $0.59 Maintained
FX impact on reported salesQ4 2025n/a~+1.5% New datapoint (favorable)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Diagnostics – China VBP/DRGQ1/Q2 Diagnostics down; VBP in China; ex‑COVID Diagnostics modest growth Headwinds continue; signs of volume pickup; outside China accelerating (U.S. +10%; Europe +6–7%; LatAm mid‑teens) Stabilizing in China; improving OUS
Diabetes – CGM penetration & U.S. dynamicsCGM $1.7B (Q1) and $1.9B (Q2), strong growth CGM $2.0B; U.S. timing effects from restocking; basal ~20% penetrated U.S.; dual‑analyte sensor expected; potential CMS for non‑insulin T2 (not in 2026 base) Continued expansion; pipeline to drive share
EP – PFA ‘Volt’ & portfolioCE Mark for Volt PFA (Mar); building mapping footprint OUS rollout strong; U.S. timing mid‑year next year plausible; integration with Insight seen as differentiator; broader/deeper lesions; reduced muscle contraction enabling conscious sedation Accelerating adoption; favorable differentiation
Structural HeartTendyne FDA approval (May); portfolio momentum TriClip Japan approval; Navitor CE expanded to low/intermediate risk; ESC guidelines upgraded TEER indications Multiple catalysts; share gains in TAVR/TEER
CRM – AVEIR leadless pacemakerBuilding momentum CRM now double‑digit grower; single chamber ~50% penetrated; dual chamber <10%; $4B TAM target to convert significant portion Strong runway
Margins/Tariffsn/aAdjusted GM 55.8%; tariff burden began Q3; mitigation initiatives in place; OM expansion teams active Near‑term headwind; mitigation progressing
Nutrition U.S. pediatricn/aShare given back as competitor recovered; WIC loss in quarter; two new WIC wins start Q1/Q2 2026; multiple launches ahead Temporary pressure; recovery plan

Management Commentary

  • “Organic sales growth of 7.5% excluding COVID test sales…double-digit EPS growth when excluding the expected decline in COVID test sales” – Robert Ford .
  • “Adjusted EPS of $1.30 was in line with the consensus estimate…adjusted operating margin was 23%…adjusted gross margin 55.8% reflecting the impact of tariffs” – CFO Phil Boudreau .
  • “We remain on track to deliver high single-digit organic sales growth and double-digit EPS growth…with increasing contributions from new products across the portfolio” – Robert Ford .
  • “Libre U.S. demand remains very strong…basal segment only about 20% penetrated in the U.S.; potential CMS coverage for non‑insulin Type 2 could be a future upside” – Robert Ford .
  • “Diagnostics outside China accelerating (U.S. +10%); lapping China headwinds begins in Q4 and fully in 2026” – Robert Ford .

Q&A Highlights

  • 2026 outlook: Management “very comfortable” with consensus for high single‑digit top‑line and double‑digit EPS growth, citing momentum, new launches (Volt U.S., dual‑analyte sensor, new Alinity, biosimilars), and lapping Diagnostic headwinds .
  • Diabetes U.S. vs OUS: U.S. growth impacted by restocking timing but on track for >20% FY; basal penetration still low; dual‑analyte sensor to drive intensive segment; CMS coverage of non‑insulin T2 possible but not assumed in 2026 base .
  • EP PFA differentiation: Volt’s focused energy delivery and Insight integration improve durability and enable conscious sedation; global PFA penetration could reach ~80% in U.S. by 2026 per discussion .
  • Gross margin/tariffs: Tariff burden began in Q3; dedicated mitigation teams progressing; OM expansion intact; expect ~57% profile going forward per CFO commentary .
  • Nutrition/WIC: Temporary share loss in U.S. pediatric; two new WIC contracts in place for Q1/Q2 2026; product launches planned to regain share .

Estimates Context

  • Q3 2025 adjusted EPS of $1.30 matched consensus ($1.30); revenue $11.37B was ~$0.02B below consensus ($11.39B) as Diagnostics headwinds offset Devices outperformance. Primary EPS estimates: 24; Revenue estimates: 24.*
  • FY25 EPS guidance narrowed to $5.12–$5.18 (midpoint unchanged), implying stable Street models near-term; Devices strength and Diagnostics easing could bias 2026 estimates upward if execution continues .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Devices momentum is intact and broad-based; Diabetes, EP, Structural Heart, Heart Failure, and CRM all delivered double‑digit growth, supporting durable top‑line expansion into 2026 .
  • Structural Heart catalysts (TriClip Japan, Navitor CE expansion, guideline upgrades) should sustain share gains in TAVR/TEER and underpin margin mix improvement .
  • Diagnostics is the swing factor: China VBP/DRG headwinds are lapping; OUS strength (U.S., Europe, LatAm) points to mid single‑digit growth potential in 2026 if China stabilizes .
  • Tariff headwinds compressed gross margin in Q3; mitigation actions are underway, and OM profile expansion remains a focus; monitor Q4 FX tailwind (~+1.5% to reported sales) .
  • Libre runway remains long (low basal penetration; OUS underpenetrated; sensor innovation), and CMS coverage for non‑insulin T2 is an upside not in the base case .
  • AVEIR leadless pacemaker is transforming CRM from low growth to double‑digit; penetration in dual chamber is early, representing meaningful runway .
  • Near-term trading: In-line print with devices strength and reaffirmed guidance likely keeps focus on upcoming EP Volt U.S. timing, Diagnostics trajectory, and structural heart data/labels as incremental catalysts .

References: Q3 press release , Q3 8-K and exhibits , Q3 earnings call transcript , Q2 press release , Q1 press release , TriClip/Structural Heart and Navitor CE Mark press release , dividend release .