Abbott Laboratories(ABT -8.25%) reported its second-quarter 2025 results on July 17, 2025, posting 7.5% organic sales growth (excluding COVID testing), 12% medical device growth, and adjusted EPS of $1.26, an 11% increase compared to the prior year and a 16% rise compared to the first quarter. Management reaffirmed its view of 2025 as a transition year marked by transient headwinds -- primarily in diagnostics -- while affirming a commitment to high single-digit percentage organic sales growth and double-digit non-GAAP EPS expansion amid robust margin gains.

Structural Heart and Electrophysiology Drive Medical Devices Leadership

Revenues from the company's medical devices segment grew 12% in the quarter, fueled by double-digit gains in diabetes care, heart failure, electrophysiology, and rhythm management, with continuous glucose monitor sales reaching $1.9 billion (up 19.5%). The launch of the Volt PFA catheter and the completion of enrollment in the PACIFLEX DUO US trial reflected its rapid innovation cadence in the electrophysiology indication.

"In electrophysiology, we had several key accomplishments in the quarter, including delivering another quarter of double-digit sales growth, initiating the launch of our new Volt PFA catheter, and completing enrollment ahead of schedule in our PACIFLEX DUO US pivotal trial."
— Phil Boudreau, Executive Vice President of Finance & Chief Financial Officer

These milestones underscore an agile R&D model that rapidly iterates and commercializes next-generation technologies, fortifying Abbott Laboratories' long-term position in high-growth and high-barrier medtech categories.

Diagnostics Faces Temporary but Significant Headwinds, Core Lab Remains Resilient

Diagnostics revenue declined 1.5%, with a $700 million full-year 2025 expected headwind from declining COVID test sales and China Core Lab volume-based procurement, although Core Lab Diagnostics (excluding China) grew 8%. Sales growth in Latin America region saw growth in the high teens, evidencing demand strength despite regional variance.

"So really the challenge that we've had is twofold here. It's really a drop-off on our COVID test sales and some challenges in the China Core Lab market together with some changes that we've seen in the U.S. foreign aid funding for HIV testing. So you look at that and say, okay, I'm not sure these are impacts that are 100% definite in the second half of the year, but I'm not gonna sit here and try and kind of forecast what COVID testing is gonna do. We had expected to see a China recovery in volume. We knew the price impact in China Core Lab, David, and we rolled that into our guidance. We had expected a market volume recovery to start happening in quite frankly, starting in Q2. We haven't seen that, so we've moved that out and into, you know, into Q4. But you put all that together, it's together with the U.S. with the funding for HIV testing that's over a billion dollars of, I guess, of headwind. And even with that billion dollars, we're still forecasting high single-digit growth and absorbing the impact of tariffs. We now expect to be just under $200 million of impact. FX, you know, as Phil kind of said in his comment, is still a headwind versus prior year on the EPS side, but much less of a headwind than what we had originally kind of anticipated back in January and quite frankly, people too. So that helps offset some of the tariff impact. So, yeah, I put this all together, and it'll be nice, David, to see these headwinds behind us next year. And then as you look to next year, you got all this great launch activity across all the businesses, whether it's Volt in the U.S., Tactiflex Duo internationally, the dual analyte sensor, the launch of the new Alinity system, the biosimilar kind of rollout. So I look at all of that, and I say, okay. You've got this headwind that we're facing here. Still, we're committing to high single-digit growth and double-digit EPS growth. And then as you look into 2026, those headwinds aren't gonna be there. And then you've got all this kind of great momentum I'm sure we'll talk about in other parts of the business. So I looked at 2026. I know what the consensus is. They look very reasonable to me, in that range of high single digits, double EPS. It's in line with our historical growth. It's in line with the guidance we've given this year, and it's in line with, you know, what our long-term sustainable growth targets are. So, yeah, it'll be good to see these elements here that I've just kind of highlighted that are specific to diagnostics. And I'll just take it a step further here. I mean, you look at our, and I mentioned this in the opening comments here. Our Core Lab business outside, and I hate doing this, but I think it gets context. If you look at the U.S., it was up 7%, 8%. The European region was up 8%. Our Latin America region was high teens. So our Core Lab business is doing very well. Alinity is doing very well. We just got this issue that, you know, we're gonna have to go through this year as it relates to VBP and the disruption that happened in our core lab business in China. But we're still very bullish on this segment. We still believe it's a very important part of the healthcare system. So like I said, looking forward to these headwinds being behind us, and we're well set up for next year."
— Robert Ford, Chairman & Chief Executive Officer

Management's ability to absorb outsized diagnostics shocks and maintain high-single-digit organic growth reflects strong portfolio diversification and operational discipline amid persistent global market volatility.

Pipeline Momentum and Biosimilars Expand Future Growth Potential

Launch activity scheduled for Volt in the U.S, Tactiflex Duo internationally, a dual analyte (glucose/ketone) sensor, next-generation Alinity systems, and the debut of biosimilars in key emerging markets reveal the broad innovation depth in the pipeline. Abbott's Established Pharmaceutical Division completed 10 biosimilar submissions to regulators targeting 2026 rollouts.

"This is an opportunity for us to really look at how do you sustain that growth rate in this business. I think we'll leverage our existing presence in these emerging markets. We're gonna bring cutting-edge medicines into these countries that I say that historically lack the access. So I think this can be a nice contributor here to our growth in this business in the next few years."
— Robert Ford, Chairman & Chief Executive Officer

Combining established market platforms with new biosimilars leverages Abbott's reach for growth outside mature geographies while requiring relatively limited incremental SG&A investments, enhancing its long-term ROIC prospects.

Looking Ahead

Abbott forecasts adjusted EPS in the range of $1.28 to $1.32 for Q3 and expects a favorable foreign exchange impact of approximately 2% on reported sales, with the full-year FX impact now anticipated to be neutral. Management called the current Street consensus for 2026 "very reasonable," as it expects recent headwinds to abate with pipeline launches supporting acceleration. No explicit biosimilar revenue targets or granular 2026 guidance figures were provided in the earnings call.