Abbott Lowers Sales Forecast Amid Diagnostics Decline and Tariff Challenges

Abbott, a leading healthcare company, has revised its sales forecast for 2025 due to a decline in diagnostics sales and the impact of tariffs. Despite these challenges, the company's medical device segment continues to show strong growth, particularly in diabetes care.

Diagnostics Decline and Revised Forecast

Abbott has lowered its 2025 organic sales growth forecast to 6-7%, down from the previous projection of 7.5-8.5%. CEO Robert Ford cited several factors contributing to this adjustment:

• A drop-off in COVID-19 testing sales
• Challenges in China's core laboratory market
• Reduction in U.S. foreign aid funding for HIV testing

These factors combined are expected to have an impact of over $1 billion on the company's sales. Despite this setback, Ford remained optimistic, stating, "Even with that billion dollars, we're still forecasting high single-digit growth and absorbing the impact of tariffs."

Tariff Mitigation and Manufacturing Strategy

The company now anticipates a tariff impact of "just under $200 million," a decrease from earlier estimates of "a few hundred million." To mitigate these costs, Abbott is taking strategic steps:

• Plans to open a new cardiovascular manufacturing facility in Georgia in 2028
• Implementing medium and long-term strategies to address tariff challenges

Ford emphasized the difficulty of reversing tariffs once implemented, highlighting the need for both immediate and future-focused solutions.

Medical Device Segment Growth

While diagnostics face headwinds, Abbott's medical device segment showcased impressive performance:

• Overall medical device sales grew by 13.4% to $5.37 billion
• The diabetes care division saw over 20% growth, reaching $1.98 billion in sales
• Electrophysiology business, featuring the new Volt pulsed field ablation device, grew by 11.5% to $700 million

Abbott is also developing a dual analyte sensor for glucose and ketone readings, expected to launch next year. Ford described this as a "real next-level, significant change in the CGM market," particularly for intensive insulin users. The company is collaborating with insulin pump manufacturers like Tandem, Sequel Med Tech, and Beta Bionics to support this new sensor.

Despite the revised forecast, Abbott's diverse portfolio and strong performance in medical devices position the company to navigate the challenges ahead while continuing to innovate in critical healthcare areas.