Abbott Laboratories CEO describes stock drop after earnings report as ‘somewhat excessive’

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Abbott Laboratories CEO Robert Ford unpacked his company's latest quarterly report in a Thursday interview with CNBC's Jim Cramer, stating that Wall Street's reaction to the results was extreme. "I think this is a little bit of an overreaction. Of course, we are all over this," Ford said. "We're focused on this, but the fundamentals of the entire rest of the company are pretty much intact, and this is just really a point in time that we have to get through."

While Abbott posted a top and bottom-line beat for the second quarter, investors were disappointed by the tightening of its full-year earnings guidance. Shares fell more than 8% by the close. Abbott is known for a variety of products and services in the healthcare field, including medical devices, diagnostics, nutritional products, and generic pharmaceuticals. The company is currently facing several lawsuits related to its specialized infant formula, but it achieved a significant legal victory late last year.

According to Ford, Abbott's diagnostics business in China was not as strong as anticipated. However, he emphasized that the company observed improvement in the segment "everywhere else except China," noting growth in the U.S., Europe, and Latin America. While Ford expressed a desire for Abbott's diagnostic business in China to recover "as soon as possible," he acknowledged that it may take a few quarters. He mentioned that the company has made management changes and meets "every single week with the diagnostic team," but indicated it is more "prudent" to plan for a recovery in the fourth quarter rather than the third.

Ford also highlighted strength in Abbott's medical devices arm, which has experienced double-digit growth for several quarters. He attributed some of this progress to a "very rich pipeline" of devices, including those designed to treat diabetes and heart issues. Additionally, he noted that Abbott's generic pharmaceutical business is performing well in emerging markets. "We bring a very large portfolio to these markets that have great fundamentals — a growing middle class, an aging population, and higher birth rates," he said. "And they're looking for companies like Abbott to deliver high-quality healthcare innovations to the market."