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Fueled by strong performances from its Medical Devices and Established Pharmaceuticals segments and an ongoing recovery in Nutrition, Abbott Labs (ABT) delivered solid 1Q25 results and reaffirmed its EPS and organic sales growth outlook for FY25. The strong growth across these businesses helped to offset ongoing softness in a Diagnostics segment that continues to be impacted by lower COVID-19 testing revenue. Furthermore, ABT is removing tariff-related risks by investing in new manufacturing facilities in the U.S. -- including $500 mln for facilities in Illinois and Texas -- which are expected to go live by the end of 2025.

• Once again, the Medical Devices segment was a standout, delivering double-digit organic revenue growth for the eighth consecutive quarter. For Q1, organic sales grew by 12.6%, driven by ongoing strength in diabetes care via ABT's FreeStyle Libre continuous glucose monitoring system. FreeStyle Libre generated $1.7 bln in sales, pushing U.S. diabetes sales higher by 27%. Structural Heart was another source of strength, generating organic growth of nearly 15%.
• Established Pharmaceuticals, ABT's branded generic medicines unit, achieved healthy organic sales growth of 7.8% with balanced growth across geographies and product lines. Emerging Markets have shown resilient demand as illustrated by organic growth of 9.3%. Key products driving growth in this segment include treatments across therapeutic areas such as gastroenterology, women’s health, pain management, cardiovascular, respiratory, and metabolic disorders.
• In Nutrition, the supply chain disruptions (raw materials shortages, logistics delays, manufacturing constraints) that created headwinds have eased, thanks to ABT's mitigation efforts, such as its investments in manufacturing capacity. Additionally, a move towards premiumization and product innovation in adult nutrition, alongside a continued recovery in U.S. infant formula, are supporting growth. Following last quarter's increase of 7.1%, organic revenue for Nutrition grew by 6.8% in Q1.
• Diagnostics remains the laggard with sales decreasing by 4.9% on an organic basis. When excluding COVID-19 testing related sales, the base Diagnostics business has consistently delivered mid- to high-single-digit organic growth, including growth of 6.1% in 4Q24 and 5.9% in 3Q24. In 1Q25, however, COVID-19 impacts fully cycled through and base business growth became the primary driver, causing organic growth to slip to 0.5% for the core lab business. 

ABT delivered a strong Q1, led by double-digit growth in Medical Devices (especially Diabetes Care), robust recovery in Nutrition, and steady gains in Established Pharmaceuticals. Margin expansion was notable as adjusted gross margin expanded by 140 bps yr/yr to 57.1%, aided by product mix and cost control. The company reaffirmed its FY25 outlook, supported by innovation, geographic diversification, and operational execution, positioning it well for continued growth in a dynamic healthcare landscape.