Abbott Labs (ABT -0.23%) suspended its full-year 2020 guidance in April because of uncertainty about the COVID-19 pandemic. But the company appeared to be in a great position to continue its winning ways after posting solid first-quarter results.

Investors found out whether or not Abbott continued to win on Thursday with the healthcare giant announcing its second-quarter results before the market opened. Here are the highlights from Abbott's Q2 update.

An Abbott Labs office building

Image source: Abbott Labs.

By the numbers

Abbott reported revenue in the second quarter of $7.3 billion. This result was down 8.2% year over year. However, it handily topped the consensus Wall Street estimate of $6.75 billion.

The company announced Q2 net income of $537 million, or $0.30 per share, based on generally accepted accounting principles (GAAP). This represented a marked decline from GAAP earnings of $1 billion, or $0.56 per share, reported in the same quarter of 2019.

On a non-GAAP adjusted basis, Abbott generated net income in the second quarter of $0.57 per share. This reflected a 30% drop from adjusted earnings of $0.82 per share in the prior-year period. But it trounced the average analysts' Q2 adjusted earnings estimate of $0.41 per share.

Behind the numbers

Why did Abbott's revenue and earnings fall so much? Blame it mainly on COVID-19. However, currency fluctuations were also a culprit in the company's revenue decline. While Abbott's revenue slid 8.2% year over year on a reported basis, the decrease was 5.4% on an organic constant-currency basis.

The COVID-19 pandemic especially impacted Abbott's medical device business. The company reported that worldwide medical device sales sank 21.2% year over year in Q2 as procedures were pushed back as a result of the coronavirus outbreak.

Abbott's established pharmaceuticals sales also fell 8.6% year over year primarily due to lower demand in Brazil, Colombia, and Russia due to the COVID-19 pandemic. However, the unit's sales in China jumped by a double-digit percentage.

It wasn't all bad news for Abbott in Q2, though. Worldwide nutrition sales rose 0.4% year over year (and 3.1% on an organic basis). This growth was driven largely by the company's Ensure adult nutrition brand and its Pedialyte oral rehydration products.

Diagnostics sales increased 4.7% year over year on a reported basis and 7.1% on an organic basis. There were several bright spots. Molecular diagnostics sales skyrocketed 233.6% thanks to surging demand for Abbott's COVID-19 tests for the m2000 and Alinity m platforms. Rapid diagnostics sales jumped 9.6%, largely as a result of demand for ID NOW platform COVID-19 tests. And diabetes care revenue soared 36.8% year over year due to continued adoption of Abbott's Freestyle Libre continuous glucose monitoring (CGM) system. 

Looking ahead

Abbott expects full-year 2020 diluted earnings per share (EPS) from continuing operations on a GAAP basis of at least $2.00. It also projects adjusted diluted EPS from continuing operations for the full year of at least $3.25.

Freestyle Libre should become an even bigger winner for Abbott in the second half of the year. The company won U.S. Food and Drug Administration clearance for Freestyle Libre 2 in June.

The main wild card for Abbott throughout the rest of 2020 is the COVID-19 pandemic. As seen in the second quarter, the coronavirus outbreak helps Abbott in some ways but hurts it overall. The healthcare stock could see increased volatility if the COVID-19 pandemic worsens in the fall.