Abbott Laboratories Q2 Earnings: Strong Medical Devices Offset by COVID Test Decline and China Pressure

Abbott Laboratories reported mixed Q2 2025 results, with earnings per share of $1.26 beating estimates by $0.01. The stock nonetheless tumbled 8.5% as investors focused on looming challenges. Medical Devices emerged as the star performer, posting 12% growth led by diabetes care and cardiovascular solutions.

Diagnostics revenue faced headwinds from declining COVID testing demand and pricing pressures in China. The company warned of potential $1 billion in 2025 impacts from new tariffs and U.S. HIV aid reductions. Third-quarter EPS guidance of $1.28-$1.32 fell short of Wall Street expectations.

Operational efficiencies improved margins, with gross margin reaching 57% and operating margin at 22.9%. Diabetes Care sales surged 19.5% to $1.9 billion, while Heart Failure products grew 14%. The results highlight Abbott's successful diversification beyond pandemic-related revenues.