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The transfusion division of health care giant Abbott screens about half of the U.S. blood supply, so the nationwide decline in blood donations since the COVID pandemic has been not only a public health problem but, for Abbott, a business problem. The company tackled the dilemma by appealing to college students’ competitive streak: Last year, it launched the “We Give Blood” campaign among students at schools in the Big Ten conference, coinciding with the college football season. 

The 2024 initiative resulted in nearly 20,000 donations, enough to save up to 60,000 lives. First-time donors represented 69% of We Give Blood participants. In and around the University of Nebraska—the school that won the competition—local blood centers saw a 27% increase in young donors (ages 16 to 24) versus the previous year. Season two kicked off this September, and is attracting donors at an even faster rate: It neared 20,000 donations in just the first four weeks of the drive.

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CTW-2023-Abbott-Graduation-F2S1

Student debt is a massive burden in the U.S. There are more than 43 million borrowers carrying a combined $1.8 trillion in obligations. Debtors often have to choose between paying off their student loans or saving for retirement. That’s why Abbott developed Freedom 2 Save. F2S is a benefit program in which enrolled employees who put 2% of their pay toward their student loans get a corporate match of 5% into their 401(k)s—keeping them from having to sacrifice their future to pay off their past. The health care company’s innovative offering required special permission from the IRS before it could launch in 2018. To date, Abbott has contributed more than $5.5 million to over 2,500 of its employees, including $1.7 million in 2022 alone. Beginning in 2024, all U.S. employers will be able to offer a similar benefit through a provision of the SECURE 2.0 Act—inspired by Abbott’s offering—which will enable employers to match employees’ student loan payments with 401(k) contributions.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

F500-2023-099-Abbott Labortories

Riding the tail end of a sales boom in COVID-19 tests, the medical device and health care products firm dropped 13 spots on the Fortune 500 in 2022, with revenue increasing only 1.3% and profits down 2%. 
<ul> 
 	<li>COVID-19 test revenue accounted for one-fifth of Abbott’s bottom line in 2022, jumping to $8.4 billion from $7.7 billion in 2021. At the end of the first quarter of 2023, the firm projected test sales to drop to $1.5 billion for the year.</li> 
 	<li>Abbott fed some of its COVID-19 test proceeds into research and development, investing an additional $2 billion in 2022.</li> 
 	<li>The Department of Justice is investigating Abbott’s infant formula plant in Michigan, which shut down from February to June 2022 owing to contamination, setting off a nationwide shortage.</li> 
</ul>

Just as it dominates our economy, Big Tech now dominates Fortune’s annual ranking of corporate reputation.

Aggregate sales hit $37.8 trillion last year—an increase of 19%, the highest annual growth rate in the list’s history.

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GPTW Health Care Large 2022-Abbott Laboratories_1000884-3 copy

Employees say: 
 
“I have never worked at a company that has put so much effort into making sure that their employees are taken care of. Abbott seems to go to great lengths to help employees, their family and the community.”

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This year’s Fortune 500 marks the 68th running of the list.

F500-2022-086-Abbott Laboratories

COVID-19 testing continued to drive revenue growth for Abbott Labs in 2021: As of January 2022, the company had distributed about 1.4 billion tests, and those generated $7.7 billion in sales in 2021. Medical devices and nutrition products like Similac and Ensure together account for about two-thirds of Abbott’s revenue. The nutrition division endured a setback in early 2022, however, when Abbott issued a voluntary recall of powdered infant formula manufactured in one of its facilities in Michigan after the plant was linked to a bacterial-infection outbreak; the shutdown contributed to a nationwide formula shortage.

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WMAC 2021-42-Abbott Laboratories

Total revenue for the world’s biggest companies fell 4.8% to $31.7 trillion this year—the first decline in half a decade.

<span data-sheets-value="{&quot;1&quot;:2,&quot;2&quot;:&quot;Abbott Laboratories leveled up on this year’s Fortune 500 list, leaping from last year’s rank of 104 to No. 89. Why? COVID testing. Abbott was one of the first to jump into the testing market, and that alacrity has paid off; the company’s diagnostics unit, which also houses its COVID test arm, raked in more than $4 billion in sales during the first quarter of 2021 alone. Abbott, though, isn’t putting all its eggs in one basket. As life starts returning to normal, the company believes its diabetes care and glucose monitoring products will continue to fuel growth. &quot;}" data-sheets-userformat="{&quot;2&quot;:12673,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:2,&quot;11&quot;:4,&quot;15&quot;:&quot;Calibri, Arial&quot;,&quot;16&quot;:11}" data-sheets-textstyleruns="{&quot;1&quot;:0}{&quot;1&quot;:46,&quot;2&quot;:{&quot;6&quot;:1}}{&quot;1&quot;:53}">Abbott Laboratories leveled up on this year’s Global 500 list, leaping from last year’s rank of 393 to No. 350. Why? COVID testing. Abbott was one of the first to jump into the testing market, and that alacrity has paid off; the company’s diagnostics unit, which also houses its COVID test arm, raked in more than $4 billion in sales during the first quarter of 2021 alone. Abbott, though, isn’t putting all its eggs in one basket. As life starts returning to normal, the company believes its diabetes care and glucose monitoring products will continue to fuel growth.

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Best Workplaces Healthcare Large 2021-Abbott Laboratories

Employees say: 
“It's really amazing to be part of a team where everyone does their best to help and assist on various projects in addition to their responsibilities.” 
Read Great Place to Work review .

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-89-Abbott Laboratories

<span data-sheets-value="{&quot;1&quot;:2,&quot;2&quot;:&quot;Abbott Laboratories leveled up on this year’s Fortune 500 list, leaping from last year’s rank of 104 to No. 89. Why? COVID testing. Abbott was one of the first to jump into the testing market, and that alacrity has paid off; the company’s diagnostics unit, which also houses its COVID test arm, raked in more than $4 billion in sales during the first quarter of 2021 alone. Abbott, though, isn’t putting all its eggs in one basket. As life starts returning to normal, the company believes its diabetes care and glucose monitoring products will continue to fuel growth. &quot;}" data-sheets-userformat="{&quot;2&quot;:12673,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:2,&quot;11&quot;:4,&quot;15&quot;:&quot;Calibri, Arial&quot;,&quot;16&quot;:11}" data-sheets-textstyleruns="{&quot;1&quot;:0}{&quot;1&quot;:46,&quot;2&quot;:{&quot;6&quot;:1}}{&quot;1&quot;:53}">Abbott Laboratories leveled up on this year’s Fortune 500 list, leaping from last year’s rank of 104 to No. 89. Why? COVID testing. Abbott was one of the first to jump into the testing market, and that alacrity has paid off; the company’s diagnostics unit, which also houses its COVID test arm, raked in more than $4 billion in sales during the first quarter of 2021 alone. Abbott, though, isn’t putting all its eggs in one basket. As life starts returning to normal, the company believes its diabetes care and glucose monitoring products will continue to fuel growth.

For an astounding 13th straight year, Apple claims the top spot in Fortune’s annual ranking of corporate reputation, based on a survey of almost 3,800 executives, directors, and analysts.

This year's Fortune Global 500 generated $33.3 trillion in revenues and $2.1 trillion in profits.

G500-2020-393-Abbott-Laboratories

Health care company Abbott Labs manufactures medical devices, diagnostic tools, and nutritional products like Ensure. While the pandemic has depressed some aspects of Abbott's business, demand for COVID-19 testing has buoyed its diagnostic arm.

The best workplaces in health care and biopharma make their employees feel valued while the health care industry continues to undergo rapid technological changes.

Best Workplaces in Health Care and Biopharma-2020-Abbott Laboratories

Employees say: 
“People aren't just here to earn their paychecks, but to make high quality products for the people that depend on them. The people also really care about each other here and go out of their way to ensure that everyone is comfortable.” 
Read Great Place to Work review .

This year's Fortune 500 marks the 66th running of the list.

F500-2020-104-Abbott-Laboratories

Health care company Abbott Labs manufactures medical devices, diagnostic tools, and nutritional products like Ensure.

As we face unprecedented collective challenges, cooperation has become a business superpower.

24.CTW20.Abbott

Health care access is a challenge in Rwanda, which makes one diagnostic innovation by Abbott Labs particularly valuable. Abbott’s prenatal panel tests simultaneously for syphilis, malaria, HIV, and hepatitis B, using only one finger-stick of blood, with results in the same visit. For expectant mothers who may have time or resources for only one trip to the clinic, that means better care; the test has also enabled a tripling of malaria case detections. 
 
At press time, health care providers were just beginning to deploy another potentially crucial Abbott diagnostic product: An “antigen” test for COVID-19 that yields results in 15 minutes and costs $5.

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Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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Abbott Laboratories is a global health care company. Founded in 1888, the company operates in four main segments: established pharmaceutical products, diagnostic products, nutritional products—including infant formula—and medical devices. As of 2024, Abbott’s medical devices segment was its largest and fastest-growing, accounting for about 45% of revenue. That segment includes devices for monitoring cardiovascular health, glucose monitoring systems for diabetes care, and neuromodulation devices for chronic pain and movement disorders.

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Abbott Laboratories (ABT): Company Profile, Stock Price, News, Rankings

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Abbott Laboratories

abbott laboratories

Good morning and thank you for standing by. Welcome to Abbott's First Quarter twenty twenty five Earnings Conference Call. All participants will be able to listen only until the question and answer portion of this call. During the question and answer session, you will be able to ask your question by pressing the star one, one keys on your touch tone phone. This call is being recorded by Abbott.

With the exception of any participants' questions asked during the question and answer session, the entire call, including the question and answer session, is material copyrighted by Abbott. It cannot be recorded or rebroadcast without Abbott's expressed written permission. I would now like to introduce Mr. Mike Camilla, Vice President, Investor Relations.

Good morning, everyone, and thank you for joining us. With me today are Robert Ford, Chairman and Chief Executive Officer and Phil Boudreaux, Executive Vice President, Finance and Chief Financial Officer. Robert and Phil will provide opening remarks. Following their comments, we'll take your questions. Before we get started, some statements made today may be forward looking for purposes of the Private Securities Litigation Reform Act of 1995, including the expected financial results for 2025.

Abbott cautions that these forward looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated in the forward looking statements. Economic, competitive, governmental, technological and other factors that may affect Abbott's operations are discussed in Item 1A, Risk Factors, to our annual report on Form 10 ks for the year ended 12/31/2024. Abbott undertakes no obligation to release publicly any revisions to forward looking statements as a result of subsequent events or developments except as required by law. On today's conference call, as in the past, non GAAP financial measures will be used to help investors understand Abbott's ongoing business performance. These non GAAP financial measures are reconciled with comparable GAAP financial measures in our earnings news release and regulatory filings from today, which are available on our website at abbott.com.

Note that Abbott has not provided the related GAAP financial measures on a forward looking basis for the non GAAP financial measures for which it is providing guidance because the company is unable to predict with reasonable certainty and without unreasonable effort the timing and impact of certain items, which could significantly impact Abbott's results in accordance with GAAP. Unless otherwise noted, our commentary on sales growth refers to organic sales growth, which is defined in the press release issued earlier today. With that, I will now turn the call over to Robert.

Thanks, Mike. Good morning, everyone, and thank you for joining us. As we progress through 2025, it is clear that we are operating in an increasingly dynamic environment. AGENT was built not just to operate, but to succeed in rapidly evolving environments like this. We have consistently demonstrated our ability to navigate the complexities arising from a range of global circumstances, the repercussions of a global pandemic, global financial crisis, numerous geopolitical events, just to name a few.

And the current evolving economic environment influenced by new tariff policies represents another global development that we are prepared to adeptly manage. The proven benefits of our diversified business model are evident now, a result of the strategic framework that drives our global manufacturing and supply chain operations. While tariffs will have a financial impact, with 90 manufacturing sites around the world and decades of experience executing our global network strategy, we're well positioned to implement mitigations to help manage the impact of the tariffs. I'll now shift our focus to discussing our results for the quarter. Overall, we achieved our target growth objective, delivering high single digit sales growth and double digit earnings per share growth.

First quarter sales grew 7% or more than 8% when excluded COVID testing sales. First quarter adjusted earnings per share of $1.09 grew 11% versus the prior year and finished at the high end of our guidance range. I'll now summarize our first quarter results in more detail before turning the call over to Phil, and I'll start with nutrition. The air sales increased 7% in the quarter. Growth in the quarter was driven by high single digit growth in adult nutrition and double digit growth in US Pediatric Nutrition.

In pediatric nutrition, our relentless focus on research, innovation, and product quality continues to make our Similac family of products the number one choice for parents in The United States. In adult nutrition, growth of 8.5% was driven by growing demand for Abbott's Ensure family of products that serve as a source of complete and balanced nutrition for people with a wide range of nutritional needs. Moving to diagnostics, sales declined 5% in the quarter due to the year over year decline in COVID-nineteen testing sales resulting from a much weaker COVID season, which primarily impacted growth in our rapid diagnostics business. In Core Laboratory Diagnostics, low single digit growth in the quarter reflects the impact of volume based procurement programs in China. Excluding China, Core Laboratory sales grew 6.5%.

And wrapping up in diagnostics, we remain on track to go live by the end of the year with two new manufacturing and R and D investments in Illinois and Texas, totaling $05,000,000,000 related to expanding our US Transfusion Diagnostic business. Our transfusion business is responsible for screening The US blood supply. Our current blood screening system, Alinity S, runs diagnostic tests to identify various antibodies and antigens that may be present in donated blood. We have developed a new system called Alinity N that will allow Abbott to enter the molecular nucleic acid testing segment of the blood screening market. This advanced technology is capable of detecting DNA and RNA of several diseases that could potentially contaminate blood donations.

The nucleic acid testing market opportunity is estimated to be around $1,000,000,000 and represents an attractive new growth opportunity for our business. Turning to EPD, where sales increased 8% in the quarter. Growth was broad based across the markets we serve, led by double digit growth in more than half of our key 15 markets. We continue to make great progress on building a best in class portfolio of biosimilars that spans across several large and attractive therapeutic areas. In January, we entered into an agreement that provides Abbott commercialization rights to four additional biosimilars across emerging markets in Asia, Latin America, The Middle East and Africa.

Through the various collaboration agreements we have executed, we have now added a total of 15 biosimilar products projected to contribute to sales over the next three years. And I'll wrap up with medical devices where sales grew 12.5%. In diabetes care, sales of continuous glucose monitors were $1,700,000,000 in the quarter and grew more than 20%, including growth of 30% in The United States. In electrophysiology, sales grew 10%, which included double digit growth in The US and high single digit growth in international markets. In March, we announced that Abbott obtained CE Mark earlier than expected for our Vault PFA system to help treat patients battling atrial fibrillation.

We have already initiated the launch of Vault and will further expand the rollout across European markets over the course of the year. In Structural Heart, growth of 15% was driven by strong performance across our market leading portfolio of surgical valves, structural interventions, and transcatheter repair and replacement products. Growth in the quarter was led by continued share gains in TAVR and growing adoption of TRICLIP. In March, new two year data from the TRILUMINATE clinical trial was presented at the American College of Cardiology Conference. The data showed that patients receiving Triclip had a statistically significant reduction in the occurrence of heart failure related hospitalizations along with sustained reductions in tricuspid regurgitation and life changing improvements in quality of life.

In Ribbon Management, growth of 6% was led by consistent and sustained market penetration of Avera, our innovative leadless pacemaker, and Assert, our newest implantable cardiac monitor. In heart failure, growth of 12% was driven by our market leading portfolio of heart assist devices which offers treatment for chronic and temporary conditions. In January, CMS issued national coverage decision to cover CardioMEMS, a small implantable sensor that provides early warning indications that help doctors treat heart failure. This expanded coverage will broaden access to CardioMEMS for those with Medicare Advantage plans and help further expand coverage to those with commercial insurance plans. In vascular, growth of 6% was led by double digit growth in vascular imaging and vessel closure products and growth from SPRE, our below the knee, resorbable stent.

In March, we announced the start of our US pivotal trial to evaluate our coronary intravascular lithotripsy system in treating severe calcifications in the coronary arteries prior to implanting a stent. We expect to complete enrollment in this trial next year and file for FDA approval shortly thereafter. We look forward to entering this large and fast growing segment of the coronary intervention market and expect this to become a meaningful growth driver for our vascular business. And lastly, in neuromodulation, we began treating patients in our TRANSCEND clinical trial, a first of its kind trial designed to evaluate using deep brain stimulation to address treatment resistant depression, which represents a market opportunity exceeding $1,000,000,000 So, summary, we delivered another quarter of top tier performance. Sales grew high single digits and earnings per share grew double digits.

We expanded gross margin by 140 basis points and operating margin by 130 basis points compared to the prior year. The pipeline continues to provide a steady cadence of new growth opportunities with more than 25 key new products forecasted to launch over the next three years and we remain on track to deliver on the financial commitments we set at the beginning of the year. I'll now turn the call to Phil. Phil?

As Mike mentioned earlier, please note that all references to sales growth rates, unless otherwise noted, are on an organic basis. Turning to our first quarter results, sales increased 6.9% or 8.3% when excluding COVID testing related sales. Adjusted earnings per share of $1.09 increased 11% compared to the prior year and finished at the high end of our guidance range and above the consensus estimate. Foreign exchange had an unfavorable year over year impact of 2.8% on the first quarter sales. During the quarter, we saw the U.

S. Dollar weaken, which resulted in a favorable impact on sales compared to exchange rates at the time of our earnings call in January. Regarding other aspects of the P and L, the adjusted gross margin profile was 57.1% of sales, which increased 140 basis points compared to the prior year. This increase was driven by delivering on the underlying organic margin expansion we forecasted and also included an added benefit of more favorable fall through from foreign exchange. Gross margin expansion has always been a significant element of Abbott's company culture.

At any point in time, a substantial number of margin improvement initiatives are underway that span across our businesses as well as our functional areas, including supply chain, marketing and other administrative groups. I'd like to take a moment to acknowledge the valuable contributions from our Avid employees around the world who are driving these exceptional margin expansion results. Turning our focus back to the first quarter results, adjusted R and D was 6.7% of sales and adjusted SG and A was 29.5% of sales in the first quarter. Adjusted operating margin was 21% of sales, which reflects an increase of 130 basis points compared to prior year. Based on current rates, we now expect exchange to have an unfavorable impact of around 1% on the full year reported sales, which includes an expected unfavorable impact around 05% on the second quarter reported sales.

Lastly, for the second quarter, we forecast adjusted earnings per share to be in the range of $1.23 to $1.27 With that, we'll now open the call for questions.

Thank you. At this time, we will conduct a question and answer session. As a reminder, to ask a question, you will need to press 11 on your telephone. You will then hear an automated message advising you that your hand is raised. To withdraw your question, please press 11 again.

For optimal sound quality, we kindly ask that you please use your handset instead of your speakerphone when asking your question. And our first question will come from Robert Marcus from JPMorgan. Your line is open.

Great. Good morning. Congrats on a good quarter and thanks for taking the questions. Robert, I'll just ask them both together since they're sort of related. First on the full year guidance update, it looks like it moves a little lower when you back out the or stays the same when you back out COVID testing, but moves a little lower including that.

But you were able to hold EPS for the full year, even including the recently announced tariffs. And I guess that's the elephant in the room is tariffs. So maybe you could walk us through the impact of that, how it hits the balance sheet and P and L timing. We're all trying to figure out what does it look like on a full year. So maybe some of the offsets, you talked about the flexibility in the manufacturing footprint, how you're using that to your advantage?

Sure, Robbie. Yeah, I mean, listen, I think the maintaining of our guidance range, we had a great first quarter here and achieved what we wanted to achieve from a target growth perspective, high single digit sales growth, double digit EPS growth. We talked about getting back to that formula and excluded COVID testing sales, which I can tell you right now are our lowest gross margin product. We grew over 8%. So I think on the top line, everything that we've put in place, we feel very good about as evidenced in our first quarter.

Gross margin expansion is a key element of our plan to get back to double digit EPS. And to your question on tariffs, it's going to be an important definitely an important muscle to exercise here and really strong performance here. I think we guided 70 basis points of improvement and we saw about 140 in the first quarter. So, a really strong performance of the team there. And then the pipeline to kind of sustain the growth around it.

I think you saw a lot of activity this first quarter, whether it's the BOLT CE mark, beginning of our IVL trial, the NCD for CardioVEMS, the new data on TriClip. So there's a lot of great activity there when you think about kind of how we guided at the beginning of the year. Everything is pretty certain for us in terms of how we're executing and the expectations we have from the product. I guess the only aspect there of maybe some uncertainty that you raise is the tariff piece. I'd say prior to tariffs, prior to the whole tariffs, were even considering, given momentum that we were seeing in the base business, we're even considering raising our EPS guidance.

Tariffs are here, so reaffirming our guidance is already I think a pretty strong statement. We've completed a pretty strong assessment of every possible different type of scenario, not just in how it could impact us, but more importantly, Robbie, what are the different scenarios to be able to mitigate it? So, the team has been working very diligently. I think we only took a break over the weekend to watch the playoff hole, and then we went right back to it. And I can tell you, we feel very comfortable right now with information that we've got and obviously looking at potential scenarios that could arise down the road that we can cover, an impact of tariff, which I'd say really two geographies, The United States and China.

So right now, we estimate the tariff impact in 2025 to be a few hundred million dollars. That's a half year impact because I see any impact in Q2. And then we start to kind of see the impact happening in Q3. But there are other items here that I'd say are variables related to the tariffs that help offset. I can tell you there's a lot of R and D slowing down or SG and A slowing down in those mitigation plans.

But there are other variables to consider here. FX, we can see what's going on with the dollar as this discussion of tariff is ongoing. Interest rates, tax, there are a lot of levers that we've got at our disposal, put it this way, to be able to mitigate. Our job here is to manage this in the aggregate and contemplate here trade offs of the decisions. We're working on I think the key thing here that as we're going through it over the last ten days is there are definitely short term things that can be done to mitigate and close gap.

And we will be looking at those and delivering on those. But I think more importantly, Ravi, is how can you actually look at these on an ongoing basis? One thing we have learned from tariffs is they don't go away. So whatever comes, it stays and it stays for a while. Look at the tariffs that went into place in 2017, they're still there.

So we need to think about how do you mitigate this more in a long term sustainable way. So yes, you can use a balance sheet and you can build some inventory and we'll probably do some of that. But if your entire strategy is building inventory, guess what's going to happen in 2026 or whenever that inventory runs out. So we're really looking at the manufacturing network and optimizing it. As I said in my prepared comments, we've got 90 manufacturing sites across the world.

We have the manufacturing strategy and framework that's been in place for decades, Robbie. And it's a framework that hasn't been put in place because of tariffs, but it's going to serve us well, that same framework, when we think about more long term planning for tariffs. So I understand the temptation that many of you will have just to take this number that I've given a few hundred million dollars and then just double as an annualized impact. I think it's a little bit too early to do that. Like I said, our manufacturing network has got the ability on a more long term basis to mitigate this considerably.

And you just got to have intent, you got to have a balance sheet obviously to be able to make the CapEx investments. Some of them take longer, some of them you could do pretty fast. I mean, think about what we did during COVID, where we built three ISO certified GMP cleanroom manufacturing. We did it three months. So, there is opportunity to do that also.

But I think the key thing here is how do you balance the short term, the medium term and the long term. And we're not putting everything in short term, even though we are going to leverage some of those variables that I talked about, FX, interest, tax, etcetera. But we're really focusing on how to mitigate this going forward.

Thank you. And our next question will come from Larry Biegelsen from Wells Fargo. Your line is open.

Good morning. Thanks for taking the question. Hey, Robert. Just wanted to focus on the EP franchise. We're headed into the Heart Rhythm Society meeting next week.

You just got approval for Volt in Europe. You put up a nice balanced quarter here. So maybe just kind of give us a kind of a state of the union and how you're feeling about that business in 2025 and beyond and just remind us of kind of The U. S. Approval timeline for Vault?

Sure. Well, listen, I've always felt bullish about our strategy. I think many of you in your reports a couple of years ago probably wouldn't have anticipated that last year with all the PSA that we would have been the second fastest growing competitor. And that's basically the strategy that the team delivered, but more importantly, the execution of it. So I think we had great success and you saw that success continue into Q1 without Voalte.

So, I think the announcement of Voalte was a little earlier than we expected and that's a good thing, obviously. And the initial feedback that my team has shared with me has been very, very positive. Obviously, we're going to start with a rollout where we'll focus a little bit on the users that were part of our clinical trial, and then we'll start to kind of ramp up that as go into the second half of the year. I think the data that was presented at the European Heart Rhythm Meeting was very strong. It stacked up very well against the other products.

Obviously, it's always difficult to compare trial to trial. There's different patients, there's different kind of protocols, but I think in general, data that presented was very strong. And I think the integration here is key. I think we continue to be the market leader in the mapping of PFA cases, at least that's what we saw in Q1. And so, we've got a built in scale and capability here to drive the adoption.

Think that some of the advantages that I think our product has, we talked about not just the integration, but I think the balloon feature is perfect for PVI. A lot of stability, optimizes contact. As I think we've said, not only in conferences, but I also said, we think contact matters and visualization of contact matters. I think there's less muscle contraction, especially with lower anesthesia or the use of just sedation. So anyways, I think the product's going to do really well.

I think it's going to do what we intended it to do. Related to timelines here in The U. S, we'll be reporting data out and we'll be submitting it this year. And I'm very optimistic that we should see an approval. I'm cautioning here, Larry, because I hate giving predictions.

But I'd say right now our timeline is probably beginning of next year. Might be surprised on that, but I think that's a good kind of base case to have. And then the investments in the business is going very well too. I think the teams have done a really good job, not only with the mapping and the infrastructure we have out in the field, but also the and D focus there. We've completed enrollment of our FocalFlex trial for CE Mark, and you know that's combining the RF and the PSA on the Tactiflex catheter.

So, feel good. I feel good about where we are. I feel good about what the team's doing. And as we accelerate the launch of Vault into international markets in the second half of the year, I think I said in the beginning of this year, I think the second half of the year will be better than the first half.

Thank you. Our next question will come from Travis Steed from BofA Securities. Your line is open.

Hey, thanks for taking the question. Just a few follow ups on tariff side. For the few hundred million half year impact, just want to make sure that assumes kind of current rates as they are today. And curious if I assume China is probably the bigger portion of that. I don't if there's any color you could kind of give on how you got to that impact.

And it sounds like you really don't want us kind of to run rate down into '26 yet because you think there's a lot of offsets. And when you think about the offsets, curious, is the Nairobi protocol included in that? Do think kind of the diabetes business fits under that protocol? How much of this can you offset with pricing? Or do think a lot of the offsets are really going to be around moving around manufacturing and changing around the supply chain?

Yes, sure. I think your question on FX rates, yes, we're making an assumption that on that mitigation as rates are as of today, you can make an argument that some of them have kind of gotten even the dollar's gotten even weaker versus some of them. We're making that assumption. Regarding US and China, I'd say right now on that initial forecast, I'd say that's pretty evenly split. But I think as we think about mitigations more long term, I think we've got opportunities across both of them.

Think one thing that is important to keep in mind is we've always had a view with our manufacturing framework. And like I said, this has been in place for decades. Two key tenants here, Travis. One, align the manufacturing as close as possible to the customer and then have an appropriate amount of redundancy. The advantages of being close to your customer, you can get efficiencies and a lot of cost advantages there.

It allows you to tap into local talent. But more importantly for us, it's always when you match your infrastructure cost with your revenue, that serves natural hedge against FX. So, doesn't do much to protect the top line, but it definitely helps protect the EPS. And so, a very large percent of our sales here in The U. S.

Are sourced from U. S. Products. And then we try and mitigate risk by spreading that manufacturing network out. So, a good example of that is Libre, for example, where we've got six manufacturing sites for Libre, six, a total of six.

And of those six, two are in The United States. And obviously, those manufacturing in The United States serve The U. S. Demand. And then the other sites outside The United States service OUS demand.

We did that with COVID too, where Binax was made in The U. S. For The U. S. And PanBio was made outside The U.

S. For international markets. So that's going to allow us to kind of mitigate a lot of this. If we had put all of our manufacturing in Southeast Asia or put all of our manufacturing in Europe, then that might be a little bit more complicated. But we've always had a view of kind of being able to spread it out and mitigate the risks that way.

Tariff wasn't on the list of risks, it provides a lot of maneuverability on this. So, think you mentioned different opportunities to be able to offset impacts. Yeah, you mentioned one, but there are lots of other opportunities to do that and we're looking at all of those. Those help to be more sustainable, but somebody could decide to not want to be part of those agreements. So we've got to really leverage the manufacturing and the manufacturing network that we have if you really want to make it sustainable.

And I think those are the two areas that we're going to be looking at and focusing on those two markets.

Thank you. Our next question will come from David Roman from Goldman Sachs. Your line is open.

And good morning. Thank you for all the color here on tariffs, obviously a topic we're watching very closely. Maybe you could switch over to the some of the business performance metrics here. And could you maybe talk to us a little bit about the broader diagnostic strategy here, certainly understanding the unique dynamics of VBP influencing the business in China. But as you think about where you're positioned and how you accelerate this business back toward end market growth, what are the key products that can help you do that?

And how are you thinking about M and A in this category to support a turn in the growth rate?

Yeah, sure. Listen, yeah, a little disappointing on the diagnostics side. Yeah, part of it was COVID, but we've also got some improvements to be made here. I'd say specifically in China, David, to your point, mean, we're seeing growth in our business, in our diagnostic business everywhere except China. Outside of China this quarter, we grew around 7%, which has been in line with our Core Lab overall growth rate.

U. S. Grew 7%. And if you remove kind of the capital piece and just focus on the consumables, it was over 8%. EMEA grew 7%.

Latin America grew mid teens. Our transfusion business grew 7%. So I think we're seeing good performance here. It's really been a challenge here, as I mentioned and as you mentioned, which is China. And it's really price driven on VBPs.

I think if you look at what's happened in other VBPs, at least the ones that we've been part of, when you bid on those businesses, yes, you have a price hit, but you have an offset because you're part of a smaller group of competitors who are picking up volume. This one here was very different in that everybody, all manufacturers stayed on the market, maintained their contracts, but we took these price hits. So we're really here faced with the price hit and no volume offset. So the team is doing a good job right now, I'd say, at navigating this. We're going have to do better in some of the other geographies.

Abbott Laboratories (ABT) Q1 2025 Earnings Call Transcript

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