What Happened?

Shares of healthcare product and device company Abbott Laboratories (NYSE: ABT) fell 8.1% in the afternoon session after the company reported second-quarter earnings that beat analyst expectations but maintained its full-year guidance, which may have disappointed investors hoping for a raised outlook. 

Abbott announced second-quarter adjusted earnings per share of $1.26 on revenue of $11.14 billion. These results surpassed Wall Street's consensus estimates, which called for an EPS of $1.25 and revenue of $11.07 billion. The company saw strong performance in its Medical Devices segment, which grew 13.4% on a reported basis, driven by robust sales in Diabetes Care, particularly its FreeStyle Libre products. Despite the solid quarterly performance, which included a 7.5% organic sales growth in its underlying base business, the company chose to maintain its full-year 2025 forecast. Abbott continues to project adjusted diluted EPS between $5.10 and $5.20. The decision not to raise guidance, even with the strong Q2 results, appears to be the primary driver behind the stock's negative reaction, as investors may have anticipated an upward revision.

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What Is The Market Telling Us

Abbott Laboratories’s shares are not very volatile and have only had 1 move greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 3 months ago when the stock gained 5.4% on the news that the company reported decent first-quarter 2025 results with revenue in line, although its organic revenue fell slightly short of Wall Street's estimates. EPS in the quarter beat slightly, while full-year EPS guidance met expectations. The full-year sales outlook was also maintained, which was encouraging despite the uncertain macro backdrop. 

Taking a closer look at the numbers, the company recorded a 12.6% organic growth in its Medical Devices segment, powered by robust demand for diabetes care and heart-related technologies. This strength helped lift total company organic sales by 6.9%, with double-digit growth in U.S. sales, even as Diagnostics weighed on results due to falling COVID-19 testing demand. Overall, this was a good quarter without many big surprises, which is a good thing in this market.

Abbott Laboratories is up 6.2% since the beginning of the year, but at $120.48 per share, it is still trading 14.1% below its 52-week high of $140.22 from March 2025. Investors who bought $1,000 worth of Abbott Laboratories’s shares 5 years ago would now be looking at an investment worth $1,214.

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