Abbott Labs expects to weather tariff impacts in the hundreds of millions of dollars

Medical products maker Abbott Laboratories worked to buoy investor confidence Wednesday as it announced that tariffs are expected to create a financial impact in the hundreds of millions of dollars, its CEO said Wednesday.

Before tariffs, Abbott was considering raising its profit guidance, CEO Robert Ford revealed Wednesday. Instead, the company with significant Minnesota operations is keeping its 2025 outlook unchanged, in a range of $5.05 to $5.25.

In light of the tariffs, Ford said on a call with investors that reaffirming the company’s guidance is already a “pretty strong statement.” Abbott stock was up about 6% in early trading Wednesday.

The White House this month briefly imposed, and then later paused for 90 days, many of the new tariffs he proposed on so-called “Liberation Day.” But the administration has raised the import tax on Chinese goods.

Abbott’s results come a day after Johnson & Johnson estimated tariffs to bite into its profit outlook by about $400 million, Reuters reported. Medical device makers Medtronic and Boston Scientific will report their fiscal results in the coming weeks.

Ford said Abbott has 90 manufacturing sites around the world and “decades of experience executing our global network strategy.” The company, which employs roughly 5,000 in Minnesota, reported about $6.2 billion in international sales for the first quarter.

Now, Chicagoland-based Abbott is investing $500 million in two new manufacturing and R&D operations in Illinois and Texas, as companies and Wall Street analysts ponder the effects of tariffs on the medtech supply chain.

“Abbott was built not just to operate but to succeed in rapidly evolving environments like this,” Ford told investors in an quarterly earnings call Wednesday.

Ford’s remarks on tariffs came as Abbott reported increasing sales, reaching into double-digit growth for the company’s medical device operations, which are significant in Minnesota.

Abbott reported an adjusted profit of $1.9 billion on first-quarter sales of about $10.4 billion. Sales increased 6.9% on an organic basis.

Sales for its medical device division increased to $4.9 billion, rising by 12.6% on an organic basis. With a key regulatory approval secured in Europe last month, Abbott is joining the race to commercialize technology that offers a new way to treat a common heart arrhythmia causing strokes.

“We had a great first quarter here and achieved what we wanted to achieve,” Ford said.

J.P. Morgan analyst Robbie Marcus, though, said “the elephant in the room is tariffs.”

An Abbott spokesperson said the company has 35 manufacturing sites in the U.S., more than any other country or region. It has invested nearly $5 billion in equipment and manufacturing as well as $10.7 billion in R&D in the country in the last five years.

The company has completed an assessment “of every possible different type of scenario” related to tariffs, Ford said.

He said the company will be assessing short-term actions such as building inventory to mitigate the effect of tariffs. But now, Ford is asking: “How can you actually look at these on an ongoing basis?”

“One thing we have learned from tariffs is, they don’t go away,” Ford said. “So whatever comes, it stays — and it stays for a while."

The company is looking to optimize its manufacturing network, Ford said. He pointed out that the company built three specialized cleanroom manufacturing facilities in about three months when the pandemic broke out.

“There is an opportunity to do that also,” Ford said. “But I think the key thing here is, you know, how do you balance the short term, the medium term, and the long term.”

Ford said the hundreds of millions figure is a half-year impact, but encouraged Wall Street analysts to hold back from doubling it to calculate the one-year impact as he said the company’s manufacturing network has the long-term ability to mitigate tariffs.

The company did not further elaborate on the hundreds of millions of dollars figure.

The country’s most powerful medtech trade group, AdvaMed, has said tariffs could lead to higher patient costs, calling on President Donald Trump to exempt medical devices. Abbott is actively involved with AdvaMed, Ford said.

“It is in the interest of the U.S. to make sure that we protect the innovation, that we protect the investment in R&D, and a lot of the manufacturing in medtech is done, I would say mostly, in the U.S. already,” Ford said.