ABT · Q3 2025 Earnings

Q: What is Abbott's view on China's growth outlook, including diagnostics, medtech, and EPD franchise? Year-to-date performance, last year's results, and normalized growth expectations?

China represents less than 6% of total Abbott revenue (down from ~10% a decade ago). EPD and nutrition businesses up double digits YTD. Cardio neuro saw sequential growth improvement. Diagnostics declined due to VBP impact. Excluding diagnostics, China growth is 5-7%. Management expects mid-single digit growth for 2026, viewing it as appropriate given Abbott's large existing China business, though other geographies offer more growth opportunities.

Q: How is Abbott thinking about left atrial appendage (LAA) closure evolution in 2026 and beyond, particularly regarding concomitant procedures? Also, barriers to CGM penetration in basal insulin users given only 20% U.S. penetration despite clinical momentum.

On LAA: Next-generation AMOLED device showing significantly positive results vs. competitors; trial enrollment completed with filing planned H1 2026, potential 2026 or 2027 launch. NOAC trial readout in 2027. On CGM: Large universe of primary care docs needs coverage with more awareness building needed. Epic integration, sampling programs, and ambulatory glucose profiles are key drivers. Management emphasizes this is more dependent on Abbott's execution than value concerns; clinical data is strong.

Q: What are Abbott's thoughts on mitral and tricuspid U.S. TAMs given landscape changes from SGLT2 inhibitors, cath lab capacity, and other factors? How will Abbott realize value from these products?

Management emphasized structural heart as critical to cardiovascular medtech leadership. Abbott now #2 in structural heart by revenue. Multiple catalysts over next couple of years: label expansions (Navitore, MitraClip), fifth-gen device launches, guideline changes, TriClip launch in Japan, and bolt-on M&A (AI imaging software for pre-procedure planning). Pipeline includes balloon TAVR, next-gen Amulet, and mitral replacement valve. Management expressed high confidence in mitral replacement valve potential based on recent clinical feedback.

Q: Update on NIC litigation status and pockets of nutrition weakness this quarter; how does management think about forward momentum?

On litigation: Abbott won summary judgment in recent federal cases; will not comment on specific cases. Standing behind products and labels. On nutrition: 4% growth in line with historical rates. U.S. pediatric weakness driven by competitive share recapture (after competitor supply disruption in 2022) and loss of large WIC state contract. Management expects share losses to impact next couple quarters but confident in recovery based on past performance. Recently won two new WIC contracts (combination higher than lost contract, effective Q1-Q2 2026). Several new product launches planned.

Cautious

Abbott Laboratories

Reported October 15, 2025

30-second summary

30-second take: Abbott posted Q3 revenue of $11.37B (+6.9% YoY) and adjusted EPS of $1.30 — landing precisely at the midpoint of the prior $1.28–$1.32 guide — with Medical Devices up 14.8% (including Diabetes Care, a sub-segment within Medical Devices, up 19.3%) offsetting a 6.6% Diagnostics decline. Management reaffirmed FY organic growth at 7.5–8.0% ex-COVID and narrowed FY EPS to $5.12–$5.18 — a symmetric tightening around an unchanged $5.15 midpoint (low end +$0.02, high end -$0.02) — while the prior ~23.5% FY adjusted operating margin guide quietly disappeared after Q3 came in at 23.0% (+40bps YoY). The setup is healthier than the tone suggests, but management is telegraphing — through range narrowing, withdrawn margin color, and "offensive and some defensive" portfolio language — that Q4 has less cushion than Q2 implied.

Headline numbers

EPS

Q3 FY2025

$1.30

Revenue

Q3 FY2025

$11.37B

+6.9% YoY

Gross margin

Q3 FY2025

51.6%

Operating margin

Q3 FY2025

18.1%

Key financials

Q3 FY2025

Metric	Q3 FY2025	YoY	Q2 FY2025	QoQ
Revenue	$11.37B	+6.9%	$11.14B	+2.0%
EPS	$1.30	—	$1.26	+3.2%
Gross margin	51.6%	—	52.7%	-110bps
Operating margin	18.1%	—	18.4%	-30bps

Guidance

Abbott narrowed full-year EPS guidance with a lower high end while reaffirming organic sales growth targets and withdrawing full-year margin guidance; Q3 EPS met guidance, but absent Q4 margin color suggests potential margin pressure ahead.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Adjusted Diluted EPS	Q3 FY2025	$1.28 to $1.32	$1.30	in-line	Met

New guidance

Metric	Period	Guide	YoY
Foreign Exchange Impact on Reported Sales	Q4 FY2025	approximately 1.5% favorable	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Adjusted Diluted EPS	FY2025	$5.10 to $5.20	$5.12 to $5.18	−$0.02 at high end; midpoint raised from $5.15 to $5.15 (unchanged midpoint but narrower range)	Lowered
Adjusted Operating Margin	FY2025	approximately 23.5% of sales	—	guidance withdrawn	Lowered

Reaffirmed unchanged this quarter: Organic Sales Growth (excluding COVID-19 testing) (7.5% to 8.0%), Organic Sales Growth (including COVID-19 testing) (6.0% to 7.0%)

Segment KPIs

Q3 FY2025

Segment	Q3 FY2025	YoY
Nutrition	$2.153B	+4.2%
Diagnostics	$2.253B	-6.6%
Established Pharmaceuticals	$1.511B	+7.5%
Medical Devices	$5.448B	+14.8%
Diabetes Care	$2.057B	+19.3%
Rhythm Management	$0.686B	+15.0%
Electrophysiology	$0.705B	+15.6%
Core Laboratory Diagnostics Organic Growth	2.2%	—
Diabetes Care Sales Growth (Reported)	19.3%	—
Adult Nutrition Organic Growth	5.4%	—

Other KPIs

Q3 FY2025

Segment	Q3 FY2025	YoY
U.S.	$4.299B	+2.3%
International	$7.07B	+9.9%
Organic Sales Growth (excluding COVID-19)	7.5%	—
Adjusted Operating Margin	23.0%	—
Continuous Glucose Monitor Sales Growth (Organic)	17.2%	—
Key Emerging Markets Pharma Growth (Organic)	11.1%	—
Dividend per Share	$0.59	—

Management tone

Narrative arc: Q2 device-and-margin confidence → Q3 cautious execution amid acknowledged headwinds.

Diagnostics shifted from "quantified, finite headwind" to "set up for a nice recovery year next year" — but the Q3 decline deepened. Last quarter management sized the drag at ~$700M and framed it as reversing into 2026. This quarter, with Diagnostics down 6.6% (vs -1.0% in Q2), CEO Robert Ford said: "I was actually in China last week...I'm encouraged to see some of the signs start to pick up in terms of volume there...diagnostics is set up for a nice recovery year next year." The story is consistent, but the deterioration in the run-rate before reversal is wider than Q2's framing suggested.

EP positioning rewritten from "defending share" to offensive portfolio completion. Q2 emphasized Volt's paroxysmal AF data and 50-country rollout. Q3 went further: "This idea that we've been playing defense over the last couple of years, it's actually been a quite offensive strategy...We're right on time and we're complete with the full portfolio that we need." This reframes the prior two years of competitor PFA launches as Abbott's intentional cadence rather than a catch-up. With all four major manufacturers having PFA systems by 2026, the message is that Abbott chose its sequencing.

2026 framing shifted from "momentum carrying into 2026" to anchoring on consensus despite "larger than expected headwinds." Q2's confident "we see this momentum carrying into 2026" became Q3's more defensive: "consensus for 2025 at that time was 7.5%, EPS growth of 10%. That's the same consensus estimates that we have today...I was comfortable with delivering that type of growth at this time last year, and I'm comfortable again today." This is a meaningful tonal step down — from leaning into 2026 to validating that the consensus print is achievable despite tariffs and a worse-than-expected diagnostics drag.

Portfolio language gained a defensive register. Ford described the portfolio as having "offensive and some defensive characteristics" — a phrase absent from prior calls. Combined with the explicit commitment to "remain unwavering in the commitment to invest in the pipeline and drive growth organically," the read is that management is preparing investors for a tighter operating environment where stability matters more than upside, and where M&A is not the next lever.

Recurring themes management leaned on this quarter:

Portfolio resilience amid China diagnostics headwindsNew product commercialization acceleration (Volt, dual analyte sensor, Alinity N, biosimilars)Medical devices double-digit growth momentum across multiple segmentsMargin expansion execution despite tariff headwindsDiabetes care market penetration opportunity (basal segment only 20% penetrated in U.S., <5% internationally)EP offensive strategy via PFA catheter differentiation and full portfolio completion

Risks management surfaced:

China VBP pricing dynamics and DRG model volume impact on diagnosticsTariff headwinds continuing into 2026 with full-year effectCOVID testing sales decline year-over-yearForeign exchange volatility (favorable impact only 1.4% in Q3, less than forecasted)CMS coverage expansion for type 2 non-insulin CGM remains uncertain timing

Q&A highlights

Vijay Kumar · Evercore ISI

What is Abbott's view on China's growth outlook, including diagnostics, medtech, and EPD franchise? Year-to-date performance, last year's results, and normalized growth expectations?

China represents less than 6% of total Abbott revenue (down from ~10% a decade ago). EPD and nutrition businesses up double digits YTD. Cardio neuro saw sequential growth improvement. Diagnostics declined due to VBP impact. Excluding diagnostics, China growth is 5-7%. Management expects mid-single digit growth for 2026, viewing it as appropriate given Abbott's large existing China business, though other geographies offer more growth opportunities.

China is <6% of total Abbott revenue (down from ~10% 10 years ago)EPD and nutrition businesses up double digits YTD in ChinaChina growth ex-diagnostics: 5-7%Expected 2026 China growth: mid-single digits

Danielle Antolfi · UBS

How is Abbott thinking about left atrial appendage (LAA) closure evolution in 2026 and beyond, particularly regarding concomitant procedures? Also, barriers to CGM penetration in basal insulin users given only 20% U.S. penetration despite clinical momentum.

On LAA: Next-generation AMOLED device showing significantly positive results vs. competitors; trial enrollment completed with filing planned H1 2026, potential 2026 or 2027 launch. NOAC trial readout in 2027. On CGM: Large universe of primary care docs needs coverage with more awareness building needed. Epic integration, sampling programs, and ambulatory glucose profiles are key drivers. Management emphasizes this is more dependent on Abbott's execution than value concerns; clinical data is strong.

Next-generation AMOLED trial enrollment completed; filing planned H1 2026NOAC trial readout expected 2027CGM basal penetration: 20% in U.S.Single chamber pacemaker penetration: ~50%

Suraj Kalia · Oppenheimer & Co.

What are Abbott's thoughts on mitral and tricuspid U.S. TAMs given landscape changes from SGLT2 inhibitors, cath lab capacity, and other factors? How will Abbott realize value from these products?

Management emphasized structural heart as critical to cardiovascular medtech leadership. Abbott now #2 in structural heart by revenue. Multiple catalysts over next couple of years: label expansions (Navitore, MitraClip), fifth-gen device launches, guideline changes, TriClip launch in Japan, and bolt-on M&A (AI imaging software for pre-procedure planning). Pipeline includes balloon TAVR, next-gen Amulet, and mitral replacement valve. Management expressed high confidence in mitral replacement valve potential based on recent clinical feedback.

Abbott achieved #2 structural heart position by revenue last yearFifth-generation MitraClip and TriClip launchedTriClip launch planned for JapanMitral replacement valve in development with 'spectacular' feedback

Joanne Wunsch · Citi

Update on NIC litigation status and pockets of nutrition weakness this quarter; how does management think about forward momentum?

On litigation: Abbott won summary judgment in recent federal cases; will not comment on specific cases. Standing behind products and labels. On nutrition: 4% growth in line with historical rates. U.S. pediatric weakness driven by competitive share recapture (after competitor supply disruption in 2022) and loss of large WIC state contract. Management expects share losses to impact next couple quarters but confident in recovery based on past performance. Recently won two new WIC contracts (combination higher than lost contract, effective Q1-Q2 2026). Several new product launches planned.

Abbott won summary judgment in federal casesNutrition organic growth: 4%U.S. pediatric impacted by WIC contract loss and competitive share recaptureWon two new WIC contracts exceeding the one lost

Answers to last quarter's watch list

Diagnostics ex-China stabilization — Reported Diagnostics worsened to -6.6% in Q3 from -1.0% in Q2; Core Lab Diagnostics ex-China grew 7% per the call, with global Core Lab organic at +2.2%. Management deferred recovery to 2026 citing China volume re-pickup signals.

Resolved negatively

Libre international acceleration — Organic CGM sales growth disclosed at 17.2%, with management citing basal CGM penetration of 20% in the U.S. and <5% internationally as the runway. Specific international Libre growth rate still not broken out separately.

Continue monitoring

Aveir CRM growth trajectory — Rhythm Management grew 15.0% in Q3, accelerating from 10.9% in Q2 and 8% in 1H — well above the 10% threshold flagged last quarter. Aveir conversion thesis is intact and strengthening.

Resolved positively

FY adjusted operating margin landing point — Q3 adjusted operating margin printed at 23.0% (+40bps YoY). Abbott then withdrew the FY operating margin guide entirely — no replacement disclosure.

Resolved negatively

Pipeline trial starts — No slippage disclosed; AMULET next-gen enrollment complete with H1 2026 filing, NOAC readout 2027, mitral replacement valve advancing.

Resolved positively

Tariff and FX realization — Management quantified Q4 FX at ~1.5% favorable (vs Q2's ~2% Q3 expectation; Ford said actual Q3 FX came in at 1.4%, "less than forecasted"). Tariffs called out as continuing into 2026 with full-year effect.

Continue monitoring

What to watch into next quarter

Q4 adjusted operating margin print — With the ~23.5% FY guide withdrawn and Q3 at 23.0% (+40bps YoY), the absence of a replacement target is the loudest signal in the print. Watch whether Q4 lands above or below 23.0% — anything below confirms the implicit cut; anything materially above suggests management was just removing a constraint, not telegraphing weakness.

Diagnostics sequential trajectory — Reported Diagnostics declined 6.6% in Q3 vs -1.0% in Q2. Watch whether Q4 narrows the decline; failure to do so undercuts the "2026 recovery year" framing and makes the FY 6.0–7.0% incl-COVID guide harder to hit.

Q4 EPS landing within the narrowed range — With 9M25 adjusted EPS at $3.65, the implied Q4 EPS is $1.47–$1.53 to hit $5.12–$5.18 FY. Anything below $1.47 would push the full year below the narrowed range.

Pediatric nutrition recovery from new WIC contracts — Two new WIC contracts effective Q1–Q2 2026 are supposed to more than offset the lost one. Watch Q4 U.S. pediatric nutrition growth as the last clean read before the new contracts kick in.

2026 framing tone — Q2 said "momentum carrying into 2026." Q3 said "comfortable with consensus." Watch whether Q4 commentary reverts to forward-leaning language or stays anchored to consensus validation — the latter would confirm a more defensive posture into the next year.

Sources

Abbott Laboratories Q3 2025 Earnings Press Release, Exhibit 99.1 — https://www.sec.gov/Archives/edgar/data/1800/000162828025045049/abt-2025q3xexhibitx991.htm
Abbott Laboratories Q3 2025 earnings call commentary and Q&A (prepared remarks and analyst exchanges)
Tapebrief Q2 2025 ABT brief (for prior guidance baseline and watch-list context)

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