The paragraph introduces the Abbott Laboratories' First Quarter 2025 Earnings Conference Call. The call, recorded and copyrighted by Abbott Laboratories, is hosted by Mike Comilla, Vice President of Investor Relations. The event includes opening remarks from Robert Ford, Chairman and CEO, and Phil Boudreau, Executive Vice President and CFO, followed by a Q&A session. Participants can ask questions during the session by pressing specific keys on their phones. The call includes forward-looking statements under the Private Securities Litigation Reform Act of 1995, which are subject to risks and uncertainties, as detailed in the company's 2024 annual report. Abbott Laboratories disclaims any obligation to update these statements unless required by law.

In the conference call, Abbott Laboratories discusses its use of non-GAAP financial measures to help investors understand its business performance, noting these are reconciled with GAAP measures in their reports. They do not provide forward-looking GAAP measures due to uncertainties. Sales growth refers to organic sales growth. Robert Ford highlights Abbott's ability to adapt to a dynamic environment, showcasing its resilience in handling global challenges like pandemics and geopolitical events. The company is confident in managing current economic changes, including new tariff policies, thanks to its diversified business model and strategic global operations framework.

The company reports that despite the financial impact of tariffs, it is well-prepared to handle them with its extensive global network. In the first quarter, the company achieved high single-digit sales growth and double-digit earnings per share growth, with sales increasing by 7% overall. Adjusted earnings per share rose 11%, reaching the high end of the guidance range. In the nutrition segment, sales increased by 7%, driven by strong growth in both adult and US pediatric nutrition. The Similac brand remains the top choice for US parents, and demand for Abbott Laboratories' Entra products contributed to 8.5% growth in adult nutrition. Conversely, the diagnostics segment saw a 5% sales decline due to a drop in COVID-19 testing sales, impacted by a weaker COVID season. Nonetheless, core laboratory diagnostics showed low single-digit growth, with a 6.5% increase in core laboratory sales, excluding China.

In the paragraph, Abbott Laboratories is on track to launch new manufacturing and R&D investments in Illinois and Texas, focusing on expanding its US transfusion diagnostic business with a $500 million investment. They are developing a new blood screening system, Alinity N, to enter the molecular nucleic acid testing market, valued at approximately $1 billion. The company is also experiencing sales growth in its Established Pharmaceuticals Division (EPD), with an 8% increase in the quarter, and has added four new biosimilar products for commercialization in emerging markets. Additionally, the medical devices sector saw a 12.5% sales increase, particularly highlighting the significant growth of continuous glucose monitors in the diabetes care segment, with a 30% rise in the US and $1.7 billion in sales for the quarter.

The paragraph highlights growth across various segments of a company's healthcare products. Electrophysiology sales increased by 10%, with the launch of the Volt PFA system in Europe after obtaining CE Mark approval. Structural heart sales grew by 15%, driven by products like surgical valves and the adoption of TriClip, which has shown positive clinical results. Rhythm Management saw a 6% growth with products like Aveir and Assert. Heart failure products experienced 12% growth, aided by increased coverage for CardioMEMS. Vascular sales grew by 6%, led by vascular imaging, vessel closure products, and the Esprit stent.

The article discusses recent developments and financial performance of a company. In March, they launched a US pivotal trial to evaluate their coronary intravascular lithotripsy system for treating severe calcification in coronary arteries, aiming to complete enrollment next year and file for FDA approval soon after. They are also conducting the TRANSCEND trial to evaluate deep brain stimulation for treatment-resistant depression, a billion-dollar market opportunity. The company reported high single-digit sales growth and double-digit earnings per share growth. They increased gross margin by 140 basis points and operating margin by 130 basis points from the previous year. Over the next three years, they plan to launch over 25 new products. First-quarter sales rose by 6.9% (8.3% excluding COVID-testing sales) and adjusted EPS of $1.09 increased 11% year-over-year, with foreign exchange negatively impacting sales by 2.8%.

During the quarter, the weakening of the US dollar positively impacted sales, and the adjusted gross margin increased to 57.1% of sales, up by 140 basis points from the previous year. This was due to organic margin improvements and favorable foreign exchange impacts. Abbott Laboratories is committed to gross margin expansion, driven by initiatives across various business functions. Phil Boudreau reported that the first-quarter adjusted R&D was 6.7% of sales, while adjusted SG&A was 29.5%. The adjusted operating margin rose by 130 basis points to 21% of sales. However, the company anticipates a 1% unfavorable impact from exchange on full-year reported sales and a 0.5% impact on second-quarter sales. The forecast for second-quarter adjusted earnings per share is $1.23 to $1.27. The call is now open for questions.

In the paragraph, Robbie Marcus from JPMorgan asks about the impact of tariffs on full-year guidance and earnings per share (EPS). He notes that while the guidance seems to have lowered when including COVID tests, the company maintained its EPS despite newly announced tariffs. CEO Robert Ford responds by highlighting their strong first-quarter performance, marked by high single-digit sales growth and double-digit EPS growth, excluding the lower-margin COVID testing sales. Ford explains that gross margin expansion is crucial for achieving their EPS goals and acknowledges the significance of managing tariffs, noting a 140 basis point improvement in gross margin in the first quarter, exceeding their initial target of 70 basis points.

The paragraph discusses the company's growth and activities in the first quarter, such as the Volt CE mark and new data on TriClip. Despite considering raising EPS guidance due to strong business momentum, the company decided to reaffirm it because of the uncertainty surrounding tariffs. They have conducted thorough assessments and mitigation plans for the tariffs, which primarily affect the United States and China, estimating a few hundred million dollars impact in 2025, particularly in the second half. The company is working diligently on scenarios to mitigate tariff impact without slowing down R&D or SG&A efforts.

The paragraph discusses the various factors impacting the company's strategy, such as foreign exchange rates, interest rates, and tariffs. It emphasizes the importance of managing these elements collectively and making trade-offs to address short-term gaps. The company is learning from past tariffs, noting that they tend to persist, and therefore plans to implement long-term, sustainable strategies to mitigate their impact. This involves optimizing its extensive manufacturing network rather than relying solely on inventory buildup. The speaker advises against hastily projecting the annual impact of their financial estimates, suggesting it is too soon for such calculations.

The paragraph mainly discusses a discussion between Robert Ford and Larry Biegelsen. Robert Ford highlights the company's manufacturing capabilities and strategic approach, emphasizing the balance between short-term and long-term investments. He mentions their successful rapid response during COVID-19 and plans to mitigate challenges moving forward. Larry Biegelsen then shifts the focus to the EP franchise and recent achievements, such as the European approval of Volt and an upcoming Heart Rhythm Society meeting. Robert expresses confidence in their strategy's success, noting their growth despite past challenges, and outlines a bright outlook for the business in the future, particularly with the upcoming US approval of Volt.

The announcement of Volt was earlier than anticipated, which was positively received. The product will initially be rolled out to users from the clinical trial, with expansion planned for the year's second half. Data presented at a European meeting was strong, comparing well with other products despite differences in trials. The company remains a market leader in PFA case mapping and possesses the scale to drive adoption. The product features, such as the balloon feature for PBI, offer advantages like stability and optimized contact, reducing muscle contraction with minimal anesthesia. There's optimism about the product's success and a U.S. approval is expected by early next year, though timelines remain cautious.

The paragraph discusses the positive progress of a business's investments and developments. The speaker expresses confidence in the team's achievements, particularly in R&D and the completion of the FocalFlex trial for CE Mark. There are plans to accelerate the launch of a product called Volt into international markets in the second half of the year, with the expectation that this period will outperform the first half. A subsequent exchange involves Travis Steed from B of A Securities asking questions related to tariff impacts, particularly concerning China, and how the company plans to offset these with strategies such as manufacturing adjustments and pricing changes. Robert Ford responds by addressing assumptions about current FX rates and potential mitigation strategies.

The paragraph discusses a strategic approach to manufacturing that emphasizes aligning production close to customers and maintaining redundancy to mitigate risks, particularly in foreign exchange (FX) impacts. By spreading manufacturing across multiple locations, the company can enhance efficiency, tap into local talent, and protect earnings. For example, products like Libre and COVID tests have dedicated manufacturing sites both in the U.S. and internationally, catering to respective markets and ensuring risk diversification. This strategy prevents over-reliance on specific regions, allowing for more robust and resilient operations.

The discussion primarily centers around strategies to manage tariffs and enhance business sustainability by leveraging the manufacturing network. Travis Steed acknowledges the importance of considering different opportunities to offset tariff impacts. David Roman from Goldman Sachs shifts the focus to business performance metrics, specifically regarding the broader diagnostic strategy and the influence of VBP on business in China. He inquires about key products and potential M&A to support growth. Robert Ford responds by expressing some disappointment in the diagnostic sector, attributing challenges partly to COVID-19, but notes growth outside China, with an overall 7% growth rate in their Core Lab business.

The paragraph discusses various growth rates in different regions, with the US and EMEA experiencing 7% growth, while Latin America saw mid-teens growth. The company's transfusion business also grew by 7%. However, China poses a challenge due to price hits without volume offset, unlike previous Value-Based Procurement (VBP) experiences where fewer competitors led to volume gains. The company aims to counterbalance these price challenges with strategic growth in other markets, managing a delicate balance between capital placement and gross margins. They aim for 7% to 9% growth to stay above market growth while expanding margins. The paragraph also highlights the importance of diagnostics in healthcare, with 70% of healthcare decisions involving diagnostic tests, justifying continued investment in this area.

The paragraph discusses Abbott Laboratories' plans to expand their blood bank business by introducing a nucleic acid testing system, which they believe will complement their existing offerings in serology and digital services. While the company is exploring both organic growth and potential mergers and acquisitions (M&A) in medical devices and diagnostics, there is no shift in their capital allocation strategy. Abbott remains committed to strategic and financially disciplined decision-making, focusing on high single-digit organic growth and ensuring investments align with return on invested capital (ROIC) and profitability goals.

The paragraph is part of a discussion during an earnings call where Vijay Kumar from Evercore ISI asks Robert Ford about the company's expectations for organic growth in the second half of the year, which is projected to be 7.5% to 8.5%. Robert Ford explains that the expected acceleration is due to several factors: the impact of new product launches that ramp up growth, improvements in year-over-year comparisons (comps), particularly related to challenges from the previous year like VBP impacts and issues in the nutrition business. He mentions that these elements will contribute to a stronger performance in the second half of the year compared to the first half.

The paragraph involves a financial discussion between Vijay Kumar, Phil Boudreau, and Joanne Wuensch, focusing on the company's commercial execution challenges, particularly in its nutrition segment and international markets. Vijay inquires about the impact of tariffs on gross margins, and Phil explains that they are offset by strong gross margin growth and favorable FX movements, mitigating tariffs' effects. Joanne Wuensch then shifts the conversation to product developments, specifically the IVL product and structural heart products, highlighting clinical trials for IVL and noting double-digit revenue growth in the structural heart segment. Robert Ford expresses excitement about entering the IVL category, characterizing it as a billion-dollar opportunity.

The paragraph discusses the growth potential of an asset acquired through the CSI acquisition, highlighting successful early trial results and plans to complete enrollment and file for approval next year. It emphasizes the catheter's deliverability and its potential in treating severe calcification. The asset complements the company's vascular business and peripheral market strategy. Additionally, the paragraph mentions a 15% growth in the structural heart segment, emphasizing the transition from a single product to a full portfolio strategy following the integration of St. Jude and increased R&D investments.

The paragraph discusses the success and future prospects of Navitor and TriClip, medical technologies in the TAVR and structural heart markets. Navitor is experiencing growth, especially in Europe, and aims to expand its presence in the U.S. where it's only in a small percentage of cases and hospitals. TriClip is gaining market share as the preferred choice due to its strong safety record, both in clinical trials and real-world use. A new generation of TriClip, which simplifies device preparation, is expected to launch soon, enhancing its usability. Financially, TriClip is anticipated to reach around $250 million annually. Additionally, recent two-year clinical data has demonstrated significant benefits, supporting its continued growth and market acceptance.

The paragraph discusses the structural heart business, which is expected to maintain strong growth rates and has opportunities for international expansion and ongoing R&D efforts. Joanne Wuensch expresses appreciation, and the conversation shifts to a question from Josh Jennings about Abbott Laboratories' strategies regarding potential exemptions in the medical devices industry in the US, China, and Europe. Robert Ford explains that Abbott doesn't rely on hope as a strategy, but they are actively involved with industry associations like AdvaMed to share data and information to influence decision-making. He emphasizes the significant size of the med tech industry and the substantial share held by US companies globally.

In this paragraph, the speakers discuss the importance of protecting innovation and investment in R&D for the US, particularly in med tech manufacturing, which largely takes place in the US. The dialogue shifts to Abbott Laboratories' diversified business model and its resilience amidst global market uncertainties. Despite ongoing NEC litigation, Robert Ford emphasizes that Abbott continues to evaluate the value-driven performance of its diverse business units, distancing the litigation from overall business value considerations. The focus remains on whether their businesses are performing optimally to drive value, without necessarily leaning towards divesting or spinning off units like some competitors.

The paragraph discusses a business leader's perspective on the company's current valuation and strategic positioning. The leader believes the company is fairly valued and emphasizes their unique strategic advantage by operating across the entire healthcare spectrum—nutrition, diagnostics, pharmaceuticals, and medical technologies. They consistently evaluate their portfolio for value creation and potential better ownership opportunities, but currently see no need to change direction. The paragraph then shifts to a discussion about strong results in the company's Rhythm Management segment, particularly in the U.S., possibly driven by Aveir. The speaker, Marie Thibault, seeks an update on the rollout and new data related to left bundle branch, which will be further discussed at HRS.

In the paragraph, Robert Ford discusses the potential of Aveir as a transformative opportunity in their portfolio, particularly in the pacing market. He anticipates that the standard of care will shift towards leadless technology within the next five years. The company is focusing on establishing a strong foundation for this change, despite the need for a different implant technique. Significant progress has been made, with increases in the number of accounts, trained physicians, and daily implants. Early adopters have also increased their usage, boosting confidence in the technology's potential to revolutionize the market. The company is further investing in R&D for next-generation leadless products.

The paragraph discusses the development of a next-generation product aimed at increasing battery life by 25%, targeting a younger demographic for implants. It mentions a leadless conduction system pacing product with FDA breakthrough designation, aiming for a pivotal trial in 2026. The strategy is to prepare the market and invest in the pipeline, contributing to a 7% growth in the CRM business. The focus extends to presenting a comprehensive EP portfolio at HRS, including the structural and ablation sides. Additionally, there is an emphasis on managing tariffs sustainably, beyond short-term measures. The speaker notes the absence of questions about Libre.

In the paragraph, the speaker addresses concerns about tariffs and macroeconomic conditions but expresses optimism about the company's performance, noting strong starts to the year and ongoing momentum. The focus is on maintaining gross and operating margin expansion without compromising growth opportunities. The speaker highlights the benefits of a diversified business model and the ability to transform complexity into sustainable growth. The company's guidance remains reaffirmed, and updates will be provided throughout the year. The conference call, led by Mike Comilla, concludes with an invitation to access a replay on Abbott Laboratories' Investor Relations website and expresses gratitude to the participants.

This summary was generated with AI and may contain some inaccuracies.