Abbott Revenue Misses Estimates Due to Weak Diagnostics Sales

• Abbott's diagnostics division faces a projected $700 million revenue hit in 2025, primarily due to steep declines in COVID-19 testing demand
• China's volume-based procurement program is creating additional pressure by purchasing laboratory equipment and consumables in bulk at substantial discounts
• Total quarterly revenue of $11.46 billion fell short of the $11.80 billion analyst consensus estimate

Summary

Abbott Laboratories missed Wall Street revenue expectations for Q4, reporting $11.46 billion versus analyst estimates of $11.80 billion, driven by significant weakness in its diagnostics and nutrition divisions.

Key Challenges:

The company's diagnostics division faces substantial headwinds, with Abbott previously warning of a $700 million revenue hit projected for 2025. This shortfall stems from two primary factors:

1. Steep decline in COVID-19 testing demand as pandemic-related testing continues to normalize
2. Pricing pressure from China's volume-based procurement (VBP) program, which purchases laboratory equipment and consumables in bulk at heavily discounted rates

Market Implications:

The revenue miss highlights ongoing challenges for medical device and diagnostics companies transitioning away from pandemic-era revenues. Abbott's exposure to China's aggressive pricing policies through the VBP program presents a structural headwind that could persist beyond 2025, potentially affecting margins and growth trajectories.

The weakness in the nutrition business adds to concerns about the company's near-term performance across multiple segments, though specific figures for this division were not disclosed in the report.

Timing: Results were reported January 22, 2025

For investors, this miss underscores the importance of monitoring how legacy COVID testing revenues continue to roll off and how Abbott manages pricing pressures in key international markets, particularly China. The substantial $700 million headwind for 2025 suggests margin compression and slower growth may continue throughout the year.