What Happened?
Shares of healthcare product and device company Abbott Laboratories (NYSE: ABT) fell 3.5% in the afternoon session after the company reported third-quarter financial results that met, but did not exceed, Wall Street's expectations.
The healthcare product maker posted quarterly revenue of $11.37 billion and adjusted earnings of $1.30 per share, both of which were in line with consensus estimates. Management also reiterated its full-year earnings guidance. While the results were not a disappointment, the lack of a significant beat on key metrics or a raised outlook gave investors little reason to bid the stock higher. In a market often looking for strong outperformance, a report that simply meets expectations can be viewed as underwhelming, leading to a modest sell-off.
The shares closed the day at $129.49, down 2.8% from previous close.
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What Is The Market Telling Us
Abbott Laboratories’s shares are not very volatile and have only had 2 moves 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 dropped 8.1% on the news that 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.
Abbott Laboratories is up 14.1% since the beginning of the year, and at $129.45 per share, it is trading close to 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 $1,206.
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