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Abbott Laboratories reported adjusted EPS of $1.31, beating the $1.28 consensus, as diagnostics revenue surged 42.3% on the Exact Sciences acquisition. "Our second-quarter results reflect the momentum we are building," Chairman and Chief Executive Officer Robert B. Ford said. "We expect this momentum to continue and drive accelerating sales and earnings growth in the second half of the year." Revenue rose 13% to $12.59 billion, topping the $12.52 billion consensus. On a comparable basis — which adjusts for the Exact Sciences acquisition, foreign exchange, and a prior-year competitor compensation payment — sales grew 4.8%. GAAP net income fell to $928 million, or 53 cents a share, from $1.78 billion, or $1.01 a share, a year earlier, weighed down by $1.36 billion in after-tax charges tied to intangible amortization, acquisition costs, and legal reserves. The company raised its full-year adjusted EPS guidance to $5.45 to $5.60, up from $5.38 to $5.58, while reaffirming comparable sales growth of 6.5% to 7.5%. Abbott projected third-quarter adjusted EPS of $1.38 to $1.46. The guidance raise signals management expects momentum to accelerate in the second half, with investors now watching for sustained margin expansion and FreeStyle Libre adoption trends. **Diagnostics led the quarter**, with worldwide sales of $3.09 billion, up 42.3% on a reported basis. The March acquisition of Exact Sciences added $919 million in cancer diagnostics revenue, with Cologuard sales growing in the mid-teens on a comparable basis, benefiting from updated American Cancer Society screening guidelines. Core Laboratory diagnostics grew 3.2% on a comparable basis, driven by strength in the U.S. and Latin America. Rapid and Molecular Diagnostics declined 8% on a comparable basis as demand for respiratory virus tests continued to normalize. **Medical Devices**, Abbott's largest segment, generated $5.85 billion in sales, up 9% reported and 8.4% on a comparable basis. Electrophysiology led with low-teens comparable growth, boosted by the Volt and TactiFlex Duo pulsed field ablation catheters. Diabetes Care sales rose 9% on a comparable basis, with continuous glucose monitor sales up 9.5%. Rhythm Management grew 9.5%, and Heart Failure rose 8.7%. Structural Heart comparable sales grew 5.7%, excluding the impact of the competitor compensation agreement that ended in the first quarter. **Established Pharmaceuticals** delivered $1.5 billion in sales, up 8.7% on a comparable basis, led by double-digit growth across key emerging markets in Latin America and Asia Pacific. Nutrition remained the weak spot, with sales of $2.14 billion declining 3.6% on a comparable basis, reflecting lower sales volumes and the impact of strategic pricing actions implemented in the fourth quarter of 2025. Nutrition sales improved sequentially, rising $127 million from the first quarter. Abbott returned $2.1 billion to shareholders in the second quarter through dividends and share repurchases. The company has increased its dividend for 54 consecutive years and remains a member of the S&P 500 Dividend Aristocrats Index. The guidance raise suggests management sees the second-half acceleration as achievable, with new product launches in pulsed field ablation and the Libre Duo dual glucose-ketone sensor providing additional growth levers. Investors will focus on the pace of FreeStyle Libre international expansion and whether Nutrition can return to growth in the second half as pricing actions take full effect. This article is for informational purposes only and does not constitute investment advice.
Abbott Laboratories raised its full-year profit forecast to as much as $5.60 a share after second-quarter results topped estimates, powered by sustained demand for its heart devices that the company expects to accelerate in the second half. The company's medical devices franchise, including its FreeStyle Libre continuous glucose monitors and cardiovascular portfolio spanning electrophysiology and structural heart, drove the outperformance, Abbott said in its earnings release. The raised guidance reflects "expected strong demand for heart devices in the second half of the year." Second-quarter adjusted earnings reached $1.31 a share, topping the $1.28 consensus from 23 analysts surveyed by LSEG. Revenue rose to $12.6 billion, above the $12.52 billion estimate and up 13% from $11.14 billion a year earlier. The company now expects full-year adjusted profit of $5.45 to $5.60 a share, compared with its prior range of $5.38 to $5.58. The midpoint of $5.53 sits above the $5.49 analyst consensus. Full-year organic sales growth is expected to land between 6.5% and 7.5%. The raised forecast signals that Abbott's core medtech businesses are gaining momentum after a period of stock underperformance. Shares have fallen 27% year to date, and the company trades at 25.15 times earnings — a discount to Boston Scientific at 32 times and Dexcom at 38 times, according to public filings. The valuation gap reflects investor skepticism about Abbott's growth trajectory, which the company is now trying to close with its upgraded outlook. Abbott's diversified portfolio spans four segments: medical devices, diagnostics, nutrition, and established pharmaceuticals. The devices division, which includes the FreeStyle Libre system and cardiovascular products, is the highest-margin and fastest-growing piece of the business. In the first quarter, the established pharmaceuticals division posted 13.2% reported sales growth in emerging markets, while nutrition sales declined 6% as the company worked through pricing adjustments. Selling, general and administrative expenses rose 22.2% year over year in the first quarter, partly reflecting costs tied to European medical device regulation compliance. The company's heart device business faces competition from Boston Scientific in structural heart and electrophysiology, and from Dexcom in continuous glucose monitoring. Abbott's FreeStyle Libre holds a leading market position, but pricing pressure and new product launches from rivals have narrowed the competitive gap. The second-half demand outlook for cardiovascular devices will be a key test of whether Abbott can sustain its market share while expanding margins. For investors, the raised guidance provides a clearer floor for earnings expectations, but the stock's year-to-date decline suggests the market is waiting for proof of execution. With the company trading at a discount to high-growth medtech peers, the second-half results will determine whether the valuation gap narrows or widens. This article is for informational purposes only and does not constitute investment advice.
**The Justice Department spent three years investigating Abbott Laboratories over a baby formula plant where cronobacter bacteria was found, then walked away from criminal charges.** The Justice Department closed a three-year criminal probe into Abbott Laboratories over its Sturgis, Michigan, baby formula plant where cronobacter bacteria was found, opting for civil penalties instead of charges that some prosecutors believed were warranted. "Ensuring the safety of our nation's food supply is a top priority for the Trump administration, however, this Department of Justice does not believe in regulation by prosecution," a DOJ spokeswoman said, confirming the probe's closure. Prosecutors had weighed a misdemeanor charge under the Food, Drug and Cosmetic Act and a separate count for misleading the government, some of the people familiar said. They also considered charging at least one individual. The department instead pursued clawing back money Abbott earned from selling formula through federally funded nutrition programs — a civil remedy that avoids criminal liability. The outcome marks a significant shift in corporate enforcement under President Trump, whose May 2025 executive order called for minimizing criminal sanctions where civil penalties could suffice. For Abbott, the resolution removes the threat of criminal prosecution that had hung over the company since FDA inspectors found five strains of cronobacter at the plant in 2022, though the company still faces a related civil settlement whose terms have not been disclosed. FDA inspectors in early 2022 found standing water in multiple locations, employees who worked directly with baby formula failing to adequately wash their hands, and the bacteria in multiple spots inside the plant. A former FDA official later testified to Congress that the facility was "out of control." Cronobacter infections had sickened four babies who drank Abbott formula produced at the plant, two of whom died. Abbott has consistently denied a link between the plant's conditions and the infant illnesses. No unopened, distributed Abbott infant formulas have tested positive for the bacteria that sickened the babies, a company spokesman said. **The Civil Path** The Justice Department said in November, as part of a related civil lawsuit joined by 31 states, that Abbott "knowingly" failed to follow manufacturing standards to protect against contamination. The suit alleged that Abbott had a "culture of concealment" at Sturgis and withheld information from the FDA. The department and Abbott have reached a settlement to resolve that case, which focuses on the company's participation in federal programs that pay for baby formula for lower-income families. The terms were not revealed. **Enforcement Shift** The decision reflects a broader recalibration of corporate enforcement under the Trump administration. Acting Attorney General Todd Blanche has said he supports penalizing companies when prosecutors also can identify and charge individuals, but has criticized pursuing cases where prosecutors lack evidence to charge individuals or that appear unwinnable at trial. Trump has nominated Blanche to the permanent position, and senators are expected to press him on his enforcement views during a confirmation hearing next month. Bill Marler, a lawyer who represents victims of food-borne illnesses, said the executive order "brought a big sigh of relief to CEOs across the country." The use of criminal penalties, he said, "did keep CEOs and people in the food business on their toes." Abbott's defense team included Mark Filip, who served as deputy attorney general under President George W. Bush. Filip last year urged the Justice Department to overhaul the consumer-focused office that steered the investigation and to remove its ability to bring criminal cases, people familiar said. This article is for informational purposes only and does not constitute investment advice.
ALZpath Inc. licensed its Alzheimer's blood-testing technology to Abbott Laboratories in a global deal, giving the diagnostics giant access to a fast-growing market for easier brain disease detection. "This partnership combines ALZpath's diagnostic technology with Abbott's global reach to accelerate access to Alzheimer's blood testing," the companies said in a joint statement. The deal comes as diagnostics companies and pharmaceutical firms race to develop blood-based tests for Alzheimer's, which affects millions worldwide. Current diagnostic methods include costly PET scans and invasive spinal taps, creating demand for simpler blood-based alternatives. Abbott, with operations in more than 160 countries, can distribute the test across hospital systems and clinical laboratories globally. For Abbott, the partnership strengthens its diagnostics portfolio in neurology, a high-growth segment where early detection tools are becoming critical as new Alzheimer's treatments enter the market. The global Alzheimer's drug market is projected to grow substantially as disease-modifying therapies from companies including Eisai Co. and Biogen Inc. gain regulatory approvals and market adoption. For ALZpath, the deal provides a commercialization pathway through one of the world's largest diagnostics companies. Financial terms of the licensing agreement were not disclosed. The partnership allows ALZpath to leverage Abbott's manufacturing capabilities, regulatory expertise, and commercial infrastructure rather than building its own sales network. The licensing agreement marks the latest collaboration in the Alzheimer's diagnostics space, where companies including Roche Holding AG and Eli Lilly & Co. are developing blood-based tests. Roche has been developing its Elecsys beta-amyloid and pTau assays, while Lilly has invested in diagnostic tools to support its Alzheimer's drug portfolio. Abbott's diagnostics business, one of the largest in the world, has been expanding its presence in neurology testing. The company already offers tests for various neurological conditions through its Alinity and Architect instrument platforms, which are installed in thousands of laboratories worldwide. This article is for informational purposes only and does not constitute investment advice.
**Abbott Laboratories shares have fallen 29.4% year to date, the steepest decline among major medical device peers, as declining respiratory testing demand and acquisition-related costs overshadow strength in its core device portfolio.** Abbott Laboratories' 29.4% year-to-date decline makes it the worst performer among large-cap medical device stocks, as post-pandemic respiratory testing normalization and a $23 billion acquisition weigh on near-term results. "Respiratory virus testing demand has normalized faster than we anticipated, creating a headwind for our Diagnostics segment," Abbott Chief Executive Officer Robert Ford said on the company's first-quarter earnings call. The stock closed at $88.41 on June 19, roughly 36% below its 52-week high of $139.06. Rapid and Molecular Diagnostics revenue fell 9.6% on a comparable basis in the first quarter, while selling, general and administrative expenses rose 22.2% year over year, partly reflecting costs tied to the Exact Sciences acquisition and European regulatory compliance. Abbott trades at roughly 18x forward earnings, a discount to the S&P 500's 22x multiple, reflecting the market's skepticism about the pace of recovery. The company's ability to restore growth depends on how quickly its Medical Devices segment — including FreeStyle Libre and cardiovascular products — can offset the drag from Diagnostics and Nutrition. ## Diagnostics Drag Masks Medical Device Strength Abbott's Diagnostics segment, which surged during the pandemic on respiratory testing demand, has become the company's biggest near-term liability. Core Laboratory grew 3.3% on a comparable basis in the first quarter, and Cancer Diagnostics added growth following the Exact Sciences acquisition, but the segment's overall profile remains uneven as respiratory seasons fluctuate. The $23 billion Exact Sciences deal, which closed earlier this year, added earnings dilution at a time when investors were already questioning Abbott's growth trajectory. The company also faces incremental costs tied to European MDR and IVDR compliance, which pushed SG&A expenses higher. Meanwhile, Abbott's Medical Devices business continues to generate steady revenue from its FreeStyle Libre continuous glucose monitor and cardiovascular product lines. FreeStyle Libre, however, faces an FDA recall and intensifying competition from Dexcom and Medtronic, which could pressure market share and pricing. ## Peer Comparison Shows Sector-Wide Pressure Abbott's decline mirrors broader weakness across medical device stocks. Boston Scientific has fallen 52% year to date after cutting its 2026 growth guidance multiple times, citing slowing demand for its Watchman heart implant and an FDA Class 1 recall on certain pacemakers. Stryker dropped about 12% after a March cyberattack disrupted manufacturing. Becton, Dickinson and Company has declined 25.8% year to date, while Labcorp has risen 2%, benefiting from momentum in specialty testing. The divergence highlights how company-specific factors — rather than sector-wide trends — are driving performance. From a technical standpoint, Abbott is trading below both its 50-day and 200-day moving averages, suggesting shares could remain under pressure in the near term. For investors, the question is whether Abbott's current valuation adequately discounts the headwinds. At roughly 18x forward earnings, the stock trades at a discount to the S&P 500 and below its five-year average of 22x. If Medical Devices revenue accelerates in the second half of 2026 and Diagnostics stabilizes, the current entry point could offer upside. But with respiratory testing demand still volatile, China uncertainty unresolved, and integration costs from Exact Sciences still flowing through, the path to recovery remains uncertain. This article is for informational purposes only and does not constitute investment advice.