Abbott Laboratories (NYSE: ABT) reported second-quarter earnings that topped analyst expectations, prompting the company to raise its full-year adjusted earnings guidance. However, the healthcare giant faces a significant challenge in accelerating sales growth in the second half of the year to meet its revenue targets.
For the quarter ended June 30, Abbott posted adjusted earnings per share (EPS) of $1.31, surpassing the consensus estimate of $1.28. Revenue came in at $12.59 billion, also above the $12.50 billion forecast. The strong performance was largely driven by robust demand for cancer diagnostics and cardiovascular devices.
Abbott now expects full-year adjusted EPS in the range of $5.45 to $5.60, up from its previous guidance. The midpoint of this range, $5.525, represents a modest increase of 4.5 cents. However, the company left its full-year comparable sales growth target unchanged at 6.5% to 7.5%. To achieve this, Abbott must deliver second-half comparable sales growth of approximately 8.6% to 10.5%, a notable acceleration from the 4.3% growth recorded in the first half of the year.
The Exact Sciences unit, which Abbott acquired, was a standout performer, contributing $919 million in revenue during the quarter. This accounted for roughly 63% of Abbott's year-over-year sales gain of $1.451 billion. The Cologuard colorectal cancer screening test saw mid-teens growth, underscoring the strength of the oncology portfolio.
Medical devices remain Abbott's primary growth engine, with segment sales reaching $5.853 billion, up 8.4% on a comparable basis. Diabetes care revenue rose to $2.188 billion, driven by a 9.5% increase in continuous glucose monitor sales. Electrophysiology and structural heart also posted solid gains of 13.4% and 5.7%, respectively. The company believes this momentum can be sustained, though investors will be watching for any signs of weakness in elective procedure volumes.
Outside of devices and oncology, performance was more mixed. Comparable nutrition sales declined 3.6%, while rapid and molecular diagnostics fell 8% as demand for respiratory virus tests cooled. These segments, if they stabilize, could ease the pressure on devices and oncology to drive overall growth.
CEO Robert Ford expressed confidence in the company's trajectory, stating, "Our second-quarter results reflect the momentum we are building." He anticipates stronger sales and earnings growth in the second half of the year.
Despite the positive earnings beat, risks remain. Lower procedure volumes or slower traction in nutrition could jeopardize the sales target. Net interest expense surged to $299 million from $50 million, while reported net income dropped 48% to $928 million, largely due to $658 million in intangible amortization. Adjusted net income, however, rose 3.5%.
Abbott also provided third-quarter adjusted EPS guidance of $1.38 to $1.46. The focus now shifts to whether Exact Sciences, Libre glucose monitors, and cardiac devices can sustain the growth needed to meet the company's ambitious second-half targets.
