Abbott Laboratories will make new investments in US manufacturing, with the impact of tariffs on medical devices and diagnostics looming over the industry.
It expects to spend $500 million on two facilities, located in Illinois and Texas, Abbott said in a statement Wednesday. The investments are to expand existing plants and boost US research and development for Abbott’s transfusion business, which is responsible for screening the US blood supply.
The company will hire as many as 200 people in Illinois and as many as 100 people in Texas to support the work, a spokesperson said.
Shares rose as much as 5.6% when markets opened in New York, the most since November.
The Abbott Park, Illinois-based medical-device maker also reaffirmed its previous annual guidance. It still expects adjusted full year earnings to reach $5.05 to $5.25 a share. However, the company was considering raising guidance before tariffs were announced, Abbott Chief Executive Officer Robert Ford told investors on a call.
“Right now, we estimate the tariff impact in ‘25 to be a few hundred million dollars,” he said. “There are definitely short-term things that can be done to mitigate and close the gap.”
Wall Street has been closely watching companies for changes to their earnings expectations as the impact of sweeping new tariffs remains uncertain.
Adjusted earnings for the quarter were $1.09 a share, compared with the average analyst estimate of $1.07 a share.
First-quarter sales were $10.4 billion, in line with Wall Street’s estimate. Medical device sales were $4.9 billion, compared to the average analyst estimate of $4.85 billion.
Tariff threat
Multi-national health-care companies like Abbott operate manufacturing plants all over the world. While pharmaceutical products were exempt from tariffs announced earlier this month, medical devices would still be subject to country-specific levies that have been partially paused for 90 days.
Roughly 45% of Abbott’s revenue in 2024 came from medical devices. The company opened a new facility in Ireland last year to make sensors for its continuous glucose monitoring products for people with diabetes. At the time, the company said the facility would have the “highest production” of those sensors in the world.
“Ireland plays a crucial role in helping Abbott deliver on our purpose, with 10 sites across all four provinces supporting our work in diagnostics, medical devices and nutrition,” the company said.
Industry groups including AdvaMed have asked US Trade Representative Jamieson Greer for exemptions for medical devices, citing worries about costs and supply chain disruptions.
“We are concerned that tariffs placed on medical and dental equipment threaten to disrupt the supply chain and raise costs for these critical items,” AdvaMed and nine other organizations wrote in a letter to Greer on April 1. “This ultimately places further financial pressure on providers, hospitals, and health systems, particularly those located in rural and medically underserved areas.”
Johnson & Johnson said it expects to record a $400 million tariff expense in 2025, mostly from impacts to its medical device business as a result of retaliatory tariffs, Chief Financial Officer Joseph Wolk told investors on a call Tuesday.
About 61% of Abbott’s sales come from markets outside of the US.
