Abbott Laboratories (ABT) delivered a strong performance in the second quarter of 2025, highlighted by robust revenue growth, expanding margins, and double-digit earnings increases. Total net sales reached $11.14 billion, a 7.4% year-over-year increase, driven by strength across most business segments. GAAP net earnings surged 36.7% to $1.78 billion, while adjusted net earnings rose 10.5% to $2.21 billion. Earnings per share reflected similar momentum, with GAAP diluted EPS up 36.5% to $1.01, and adjusted EPS increasing 10.5% to $1.26.

Operational efficiency was a clear highlight, as both adjusted gross margin and adjusted operating margin expanded by 100 basis points year-over-year, reaching 57% and 22.9% of sales, respectively. The company also improved its GAAP operating earnings by 23% to $2.05 billion, reflecting enhanced leverage and favorable product mix. Tax efficiencies further supported profitability, with the GAAP tax rate falling to 17.3%, and the adjusted rate at 16.5%.

The standout performer was Abbott’s Medical Devices segment, which posted $5.37 billion in sales, up 13.4% reported and 12.2% organically. This growth was propelled by broad-based strength across key franchises, including Diabetes Care (notably the FreeStyle Libre CGM, which generated $1.9 billion, up 21.4%) and cardiovascular innovations like the AVEIR leadless pacemaker and Volt PFA catheter. The U.S. market led growth with a 14.6% sales increase, closely followed by a 12.4% international rise.

Nutrition saw modest gains, with $2.21 billion in sales, up 2.9% reported. Growth was led by Adult Nutrition, which rose 6.1%, with balanced contributions from both U.S. and international markets. In Diagnostics, sales dipped 1.0%, mainly due to a steep decline in COVID-19 testing revenues and ongoing challenges in China. However, core laboratory diagnostics performed well outside of China, particularly in the U.S. and Europe.

The Established Pharmaceuticals division reported $1.38 billion in sales, growing 6.9% reported and 7.7% organically. All sales were international, with emerging markets surpassing $1 billion in quarterly revenue for the first time—a key milestone that sets the stage for future biosimilar launches in 2026.

Geographically, U.S. sales grew 8.7%, and international sales rose 6.6%, with Medical Devices again leading in both regions. The company continues to benefit from its diversified model, which helped offset headwinds in Diagnostics and FX pressures.

Looking ahead, Abbott reaffirmed its full-year guidance, projecting organic sales growth of 7.5% to 8.0% (excluding COVID-19 testing), and adjusted EPS of $5.10 to $5.20. The company anticipates Q3 adjusted EPS between $1.28 and $1.32 and maintains a strong commitment to shareholder returns, with its 406th consecutive quarterly dividend declared.

Management remains confident in its strategic positioning, highlighting continued innovation in Medical Devices and Diagnostics, margin improvement, and disciplined capital deployment. Despite external headwinds like tariffs and FX, Abbott expects to exit 2025 with strong momentum, targeting high single-digit revenue growth and double-digit EPS growth into 2026.