Abbott backs profit forecast, to invest $500 million in US amid tariffs

By Christy Santhosh and Puyaan Singh

April 16 (Reuters) - Medical device maker Abbott Laboratories ABT.N maintained its annual profit forecast on Wednesday and said it expected the U.S. tariffs to hit earnings by a "few hundred million dollars".

Shares rose 6% in morning trade, as the company also announced $500 million in new investments in manufacturing and research projects in Illinois and Texas.

The projects, expected to go live by the end of the year, will help Abbott mitigate any likely impact from President Donald Trump's aggressive levies on China, a key source of raw materials for the pharmaceutical and medical device sectors.

On Tuesday, larger peer Johnson & Johnson JNJ.N forecast a $400-million impact from the tariffs while maintaining its profit forecast.

Abbott, which also makes diagnostics and nutritional products, has operations in several international markets including China. It has 89 manufacturing facilities around the world, with 35 of them in the U.S.

CEO Robert Ford said Abbott's continuous glucose monitor, FreeStyle Libre, is made at six sites across the world, including two in the U.S.

He said the company expects the impact from tariffs to begin in the third quarter.

Evercore ISI analyst Vijay Kumar expects the impact from tariffs to be about $300 million for Abbott this year.

Abbott reaffirmed its 2025 profit forecast of $5.05 to $5.25 per share, even as its first-quarter adjusted earnings of $1.09 per share beat analysts' estimates by 2 cents, according to data compiled by LSEG.

"We breathe a sigh of relief," said BTIG analyst Marie Thibault.