Shares of Abbott Laboratories jumped Wednesday after the diversified health-care company delivered strong first-quarter results and left its earnings guidance intact — a big sign of confidence in an uncertain time. Revenue in the three months ended March 31 rose 4% to $10.36 billion, narrowly missing the consensus of $10.4 billion, according to estimates compiled by LSEG. Organic sales, excluding Covid testing results, rose 8.3%, beating the 7.7% estimate, according to FactSet. Adjusted earnings per share (EPS) increased 11.2% on an annual basis to $1.09, topping expectations by 2 cents, LSEG data showed. ABT YTD mountain Abbott Laboratories YTD Abbott’s earnings rally extends what has already been a good year for the stock in a brutal overall market. Shares of Abbott entered Wednesday’s session as the second-best performing Club stock, advancing 11.6%. Only CrowdStrike , with a 14.8% gain, had done better. Abbott has also significantly outperformed a basket of medical device stocks this year. Bottom line Abbott turned in an excellent quarter in a difficult, tariff-fueled environment. The company topped Wall Street expectations on its three primary profitability metrics — earnings per share, adjusted gross margin, and adjusted pretax income margin — while also delivering better-than-expected organic sales growth when excluding Covid tests. The miss on topline revenue is not concerning. For starters, it was just $40 million below consensus. Plus, the shortfall is tied to its diagnostics segment, which faces pressures largely outside its control — specifically, low-margin Covid test sales were down $120 million from a year ago, and then China’s national strategy to control health-care costs remained a drag on the prices paid to Abbott. “We’re seeing growth in our growth in our diagnostic business everywhere except China,” CEO Robert Ford said on the earnings call. “Outside of China this quarter, we grew around 7%.” Abbott is looking at ways to stoke growth in other geographies to offset the realities of doing business in China, Ford said. “We’re just going to have to go through this. [China] is still an important market. It’s still got good profitability.” Abbott Laboratories Why we own it : Abbott is a high-quality medical technology company growing at a fast clip for its industry. The stock has dealt with various overhangs since we’ve owned it, such as litigation concerns tied to its specialized infant formula; falling Covid testing sales; and concerns that GLP-1 adoption will disrupt its continuous glucose monitor business. However, As Abbott’s organic sales growth continues to shine. Competitors : Dexcom , Boston Scientific and Edwards Lifesciences Most recent buy : May 29, 2024 Initiated : Jan. 29, 2024 The cherry on top of the quarter was that Abbott reaffirmed its 2025 earnings guidance of $5.05 to $5.25 per share despite a considerably different tariff picture than in late January . Abbott estimates a tariff hit this year of a…
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