UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 10-Q

(Mark One)

x                              QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2007

OR

o                                 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                                  to

Commission File No. 1-2189

ABBOTT LABORATORIES

100 Abbott Park Road

Abbott Park, Illinois 60064-6400

Telephone:  (847) 937-6l00

Indicate by check mark whether the registrant: (l) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of l934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes x  No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes o  No x

As of September 30, 2007, Abbott Laboratories had 1,545,272,517 common shares without par value outstanding.

PART  I.  FINANCIAL INFORMATION

Abbott Laboratories and Subsidiaries

Condensed Consolidated Financial Statements

(Unaudited)

Abbott Laboratories and Subsidiaries

Condensed Consolidated Statement of Earnings

(Unaudited)

(dollars and shares in thousands except per share data)

The accompanying notes to condensed consolidated financial statements are an integral part of this statement.

2

                    Abbott Laboratories and Subsidiaries

      Condensed Consolidated Statement of Cash Flows

(Unaudited)

(dollars in thousands)

The accompanying notes to condensed consolidated financial statements are an integral part of this statement.

3

Abbott Laboratories and Subsidiaries

Condensed Consolidated Balance Sheet

(Unaudited)

(dollars in thousands)

The accompanying notes to condensed consolidated financial statements are an integral part of this statement.

4

Abbott Laboratories and Subsidiaries

Notes to Condensed Consolidated Financial Statements

September 30, 2007

(Unaudited)

Note 1 — Basis of Presentation

The accompanying unaudited, condensed consolidated financial statements have been prepared pursuant to rules and regulations of the Securities and Exchange Commission and, therefore, do not include all information and footnote disclosures normally included in audited financial statements.  However, in the opinion of management, all adjustments (which include only normal adjustments) necessary to present fairly the results of operations, financial position and cash flows have been made.  It is suggested that these statements be read in conjunction with the financial statements included in Abbott’s Annual Report on Form 10-K for the year ended December 31, 2006.

Note 2 — Reclassification of Assets Previously Classified as Held for Sale

On January 17, 2007, the date that Abbott agreed to sell its core laboratory diagnostics businesses to GE, the assets of the operations held for sale and the liabilities to be assumed in the intended sale were classified as held for sale and depreciation of property and equipment and amortization of intangible assets was discontinued.  On July 11, 2007, Abbott announced that Abbott and GE mutually agreed to terminate the contract to sell Abbott’s core laboratory diagnostics business to GE.  The assets of the operations previously held for sale and the liabilities to be assumed in the intended sale have been reclassified to assets held and used.  Accordingly, depreciation and amortization that was discontinued in the amount of approximately $99 million has been recorded in the third quarter of 2007.

Note 3 — Adoption of New Accounting Standards

Effective January 1, 2007, Abbott adopted Statement of Financial Accounting Standards (SFAS) No. 157, “Fair Value Measurements,” SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities,” and FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes.”   Adoption of these Standards and Interpretation did not have a material impact on Abbott’s financial position.

SFAS No. 157 applies to all fair value measurements not otherwise specified in an existing standard, it clarifies how to measure fair value, and it expands fair value disclosures.  For Abbott, SFAS No. 157 does not significantly change the valuation of assets versus previous practice.  However, for liabilities, SFAS No. 157 requires that a fair value measurement be the amount that a company would pay to transfer a liability to a third party.  Under previous practice, liabilities were valued under a number of different methods.

SFAS No. 159 allows companies to measure specific financial assets and liabilities at fair value, such as debt or equity investments.   The fair value option for the investment in Boston Scientific common stock was applied effective January 1, 2007.  Abbott applied the fair value option to its investment in Boston Scientific stock under SFAS No. 159 because, unlike its other equity investments, the Boston Scientific stock is not a strategic investment and Abbott is required to dispose of the stock no later than October 2008.  Abbott was subject to a limitation on the amount of shares it may sell in any one month through October 2007 and Abbott will not reacquire the Boston Scientific shares it sells.  Accordingly, since at adoption, realized gains or losses were expected in the near future, the fair value option better represented the near-term expected earnings impact from sales of the stock.   Under the fair value option, any cumulative unrealized gains or losses on an equity investment previously accounted for as an available-for-sale security is recorded as a cumulative effect adjustment to retained earnings as of the date of adoption of the standard.  The pretax and after tax adjustment to Earnings employed in the business upon adoption was $297 million and $189 million, respectively, and the fair value and carrying amount of the investment before and after adoption was $1.0 billion.  The pretax and after tax adjustment to Accumulated other comprehensive income was $303 million and $182 million, respectively.   The effect of the adoption on deferred income taxes was not significant.

FASB Interpretation No. 48 requires that a recorded tax benefit must be more likely than not of being sustained upon examination by tax authorities based upon its technical merits.  The amount of benefit recorded is the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement.

5

Notes to Condensed Consolidated Financial Statements

September 30, 2007

(Unaudited), continued

Note 4 — Business Combinations and Related Transactions

On April 21, 2006, Abbott acquired Guidant’s vascular intervention and endovascular solutions businesses for approximately $4.1 billion, in cash, in connection with Boston Scientific’s acquisition of Guidant.  In addition, Abbott will also pay to Boston Scientific $250 million each upon government approvals to market the Xience V drug-eluting stent in the U.S. and in Japan.  Government approvals are anticipated in 2008 for the U.S. and in 2009 for Japan.  Each $250 million payment will result in additional consideration for the acquisition of Guidant’s vascular intervention and endovascular solutions businesses.  The allocation of the purchase price as of September 30, 2006 resulted in a charge of $665 million for acquired in-process research and development, intangible assets of $1.2 billion, goodwill (primarily deductible) of $1.7 billion and tangible net assets of $580 million.

A substantial amount of the acquired in-process research and development charge relating to the Guidant acquisition related to drug eluting and bioabsorbable stents.  The research efforts ranged from 35 percent to 85 percent complete at the date of acquisition.  The valuation method used to fair value the projects was the Multi-period Excess Earnings Method (Income Approach) and the risk-adjusted discount rates used ranged from 16 percent to 25 percent.  In developing assumptions for the valuation model, comparable Abbott products or products marketed by competitors were used to estimate pricing, margins and expense levels.  As of September 30, 2007, the research efforts were primarily on schedule.  The estimated projected costs to complete totaled approximately $510 million as of September 30, 2007, with anticipated product launch dates from 2008 through 2013.  There have been no significant changes in the development plans for the acquired incomplete projects.  Significant net cash inflows will commence within one to two years after product launch.

In order to facilitate Boston Scientific’s acquisition of Guidant, Abbott also acquired 64.6 million shares of Boston Scientific common stock directly from Boston Scientific and loaned $900 million to a wholly-owned subsidiary of Boston Scientific.  The common stock was valued at $1.3 billion and the note receivable was valued at $829 million at the acquisition date.  In connection with the acquisition of the shares, Boston Scientific is entitled to certain after-tax gains upon Abbott’s sale of the shares.  In addition, Boston Scientific agreed to reimburse Abbott for certain borrowing costs on debt incurred to acquire the Boston Scientific shares.   Abbott recorded a net derivative financial instruments liability of $59 million for the gain-sharing derivative financial instrument liability and the interest derivative financial instrument asset.  The effect of recording the shares, the loan to Boston Scientific and the derivative financial instruments at fair value on the date of acquisition resulted in the recording of additional goodwill of approximately $204 million.

In December 2006, Abbott acquired Kos Pharmaceuticals Inc. for cash of approximately $3.8 billion, net of cash held by Kos Pharmaceuticals Inc.  The valuation of certain tangible assets and liabilities related to the acquisition of Kos Pharmaceuticals Inc. is preliminary.

A charge of approximately $1.3 billion for acquired in-process research and development was recorded relating to the Kos Pharmaceuticals Inc. acquisition, which related primarily to cholesterol treatment drugs.  The research efforts ranged from 70 percent to 80 percent complete at the date of acquisition.  The valuation method used to fair value the projects was the Multi-period Excess Earnings Method (Income Approach) and the risk-adjusted discount rate used was 16 percent.  In developing assumptions for the valuation model, comparable Abbott products or products marketed by competitors were used to estimate pricing, margins and expense levels.  As of September 30, 2007, one drug was approved for marketing in the U.S. and the remaining research efforts were primarily on schedule.  The estimated projected costs to complete the projects totaled approximately $78 million as of September 30, 2007 with anticipated product launches in 2008.  There have been no significant changes in the development plans for the acquired incomplete projects.  Significant net cash inflows will commence with the launches of the products.

6

Notes to Condensed Consolidated Financial Statements

September 30, 2007

(Unaudited), continued

Note 5 — Supplemental Financial Information

Other (income) expense, net for the third quarter of 2007 includes a $35 million fair market value loss adjustment to Abbott’s investment in Boston Scientific common stock.  Other (income) expense, net for the first nine months of 2007 includes a $136 million fair market value loss adjustment to Abbott’s investment in Boston Scientific common stock and a realized gain of $37 million on the sales of Boston Scientific stock.  Other (income) expense, net for the third quarter and first nine months of 2006 includes fair value gain adjustments of $23 million and $98 million, respectively, to certain derivative financial instruments included with the investment in Boston Scientific common stock.

Investments at September 30, 2007 and December 31, 2006 consist of the following:

(dollars in thousands)

Note 6 — Taxes on Earnings

Taxes on earnings reflect the estimated annual effective rates, including charges for interest and penalties, and the effect of the resolution of prior years’ income tax audits in the third quarter 2006 and the effect of other discrete tax events that occurred in the second and third quarters of 2006.  For the nine months ended September 30, 2006, 10.9 percentage points of tax benefit was attributed to the income tax audit resolution and other discrete items, primarily the tax benefit on acquired in-process and collaborations research and development.  The effective tax rates are less than the statutory U.S. federal income tax rate principally due to the domestic dividend exclusion and the benefit of lower statutory tax rates and tax exemptions in several taxing jurisdictions.

Unrecognized tax benefits as of the adoption of FASB Interpretation No. 48 on January 1, 2007 were approximately $579 million, which if recognized, would decrease taxes on earnings.  The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate in 2007 totaled approximately $210 million.  Due to the inherent uncertainties in tax audits, Abbott is unable to estimate the range of reasonably possible change in its unrecognized tax benefits, if any, within the next twelve months.  Reserves for interest and penalties are not significant.  In the U.S., Abbott’s federal income tax returns through 2003 are settled, and the income tax returns for years after 2003 are open.  There are numerous other income tax jurisdictions for which tax returns are not yet settled, none of which are individually significant.

7

Notes to Condensed Consolidated Financial Statements

September 30, 2007

(Unaudited), continued

Note 7 — Litigation and Environmental Matters

Abbott has been identified as a potentially responsible party for investigation and cleanup costs at a number of locations in the United States and Puerto Rico under federal and state remediation laws and is investigating potential contamination at a number of company-owned locations.  Abbott has recorded an estimated cleanup cost for each site for which management believes Abbott has a probable loss exposure.  No individual site cleanup exposure is expected to exceed $3 million, and the aggregate cleanup exposure is not expected to exceed $15 million.

There are a number of patent disputes with third parties who claim Abbott’s products infringe their patents.  In one dispute, which Abbott assumed as part of the Guidant acquisition, reserves equal to the expected resolution have been recorded.  In another dispute, filed in April 2007, Abbott is unable to estimate a range of possible loss, if any, and no reserve has been recorded.

There are several civil actions pending brought by individuals or entities that allege generally that Abbott and numerous pharmaceutical companies reported false or misleading pricing information relating to the average wholesale price of certain pharmaceutical products in connection with federal, state and private reimbursement.  Civil actions have also been brought against Abbott, and in some cases other members of the pharmaceutical industry, by state attorneys general seeking to recover alleged damages on behalf of state Medicaid programs.  In May 2006, Abbott was notified that the U.S. Department of Justice intervened in a civil whistle-blower lawsuit alleging that Abbott inflated prices for Medicaid and Medicare reimbursable drugs.  The outcome of these investigations and litigation could include the imposition of fines or penalties.  Abbott is unable to estimate the amount of possible loss, and no loss reserves have been recorded for these exposures.  Many of the products involved in these cases are Hospira products.  Hospira, Abbott’s former hospital products business, was spun off to Abbott’s shareholders in 2004.  Abbott retained liability for losses that result from these cases and investigations to the extent any such losses both relate to the sale of Hospira’s products prior to the spin-off of Hospira and relate to allegations that were made in such pending and future cases and investigations that were the same as allegations existing at the date of the spin-off.

Within the next year, legal proceedings may occur that may result in a change in the estimated reserves recorded by Abbott.  For its legal proceedings and environmental exposures, except as noted in the second and third paragraphs of this footnote, Abbott estimates the range of possible loss to be from approximately $180 million to $325 million.  The recorded reserve balance at September 30, 2007 for these proceedings and exposures was approximately $215 million.  These reserves represent management’s best estimate of probable loss, as defined by Statement of Financial Accounting Standards No. 5, “Accounting for Contingencies.”

While it is not feasible to predict the outcome of all such proceedings and exposures with certainty, management believes that their ultimate disposition should not have a material adverse effect on Abbott’s financial position, cash flows, or results of operations, except for the cases and investigations discussed in the third paragraph of this footnote, the resolution of which could be material to cash flows or results of operations for a quarter.

8

Notes to Condensed Consolidated Financial Statements

September 30, 2007

(Unaudited), continued

Note 8 — Post-Employment Benefits

(dollars in millions)

Retirement plans consist of defined benefit, defined contribution, and medical and dental plans.  Net cost for the three and nine months ended September 30 for Abbott’s major defined benefit plans and post-employment medical and dental benefit plans is as follows:

Abbott funds its domestic defined benefit plans according to IRS funding limitations.  In the first quarters of 2007 and 2006, $200 was contributed to the main domestic defined benefit plan and $75 and $40, respectively, was contributed to the post-employment medical and dental benefit plans.

Note 9 — Comprehensive Income, net of tax

(dollars in thousands)

Note 10 — Segment Information

(dollars in millions)

Abbott’s principal business is the discovery, development, manufacture and sale of a broad line of health care products.  Abbott’s products are generally sold directly to retailers, wholesalers, hospitals, health care facilities, laboratories, physicians’ offices and government agencies throughout the world.  Abbott’s reportable segments are as follows:

9

Notes to Condensed Consolidated Financial Statements

September 30, 2007

(Unaudited), continued

Pharmaceutical Products — Worldwide sales of a broad line of pharmaceuticals.  For segment reporting purposes, two pharmaceutical divisions are aggregated and reported as the Pharmaceutical Products segment.

Nutritional Products — Worldwide sales of a broad line of adult and pediatric nutritional products.

Diagnostic Products — Worldwide sales of diagnostic systems and tests for blood banks, hospitals, commercial laboratories and alternate-care testing sites.  For segment reporting purposes, three diagnostic divisions are aggregated and reported as the Diagnostic Products segment.

Vascular Products — Worldwide sales of coronary, endovascular and vessel closure products.

Abbott’s underlying accounting records are maintained on a legal entity basis for government and public reporting requirements.  Segment disclosures are on a performance basis consistent with internal management reporting.  Intersegment transfers of inventory are recorded at standard cost and are not a measure of segment operating earnings.  The cost of some corporate functions and the cost of certain employee benefits are charged to segments at predetermined rates that approximate cost.  Remaining costs, if any, are not allocated to segments.  Effective in the second quarter of 2007, the Diagnostic segment was reorganized.  Prior period segment information has been adjusted to reflect this change.  For acquisitions prior to 2006, substantially all intangible assets and related amortization are not allocated to segments.  The following segment information has been prepared in accordance with the internal accounting policies of Abbott, as described above, and are not presented in accordance with generally accepted accounting principles applied to the consolidated financial statements.

(a)          The decrease in Nutritional Products segment operating earnings for the three and nine months ended September 30, 2007 was due to the completion of the U.S. co-promotion of Synagis in 2006.

(b)         The increase in Vascular Product segment sales for the nine months ended September 30, 2007, is primarily due to the acquisition of Guidant’s vascular intervention and endovascular solutions businesses on April 21, 2006.

(c)          Sales from the diabetes, bulk pharmaceuticals, spine and animal health businesses are included in Other sales.

(d)         Other, net for the three months and nine months ended September 30, 2007, includes acquisition integration expenses related to the acquisitions of Guidant’s vascular intervention and endovascular solutions businesses and Kos Pharmaceuticals Inc., fair market value loss adjustments to Abbott’s investment in Boston Scientific common stock and the cost of terminating a contract.   Other, net for the three months ended September 30, 2007, also includes the reinstatement of depreciation and amortization on assets that were classified as held for sale that was suspended as of January 17, 2007.  This depreciation and amortization was recorded in the third quarter of 2007, as these operations were no longer classified as held for sale as of July 11, 2007.

10

Notes to Condensed Consolidated Financial Statements

September 30, 2007

(Unaudited), continued

Note 11 — Incentive Stock Programs

In the first nine months of 2007, Abbott granted 20,067,221 stock options, 15,476,295 replacement stock options, 1,537,270 (net of forfeitures of 87,400 shares) restricted stock awards and 632,780 restricted stock units under the programs.  At September 30, 2007, approximately 28 million shares were reserved for future grants.  Information regarding the number of options outstanding and exercisable at September 30, 2007 is as follows:

The total unrecognized compensation cost related to all share-based compensation plans at September 30, 2007, amounted to approximately $321 million which is expected to be recognized over the next three years.

Note 12 — Equity Method Investment

(dollars in millions)

Abbott’s 50 percent-owned joint venture, TAP Pharmaceutical Products Inc. (TAP), is accounted for under the equity method of accounting.  Summarized financial information for TAP is as follows:

Note 13 — Goodwill and Intangible Assets

(dollars in millions)

Foreign currency translation adjustments and other adjustments increased goodwill in the first nine months of 2007 and 2006 by approximately $222 and $322, respectively.  Abbott recorded total goodwill of approximately $1,900 related to the acquisition of Guidant’s vascular intervention and endovascular solutions businesses in the second quarter of 2006.  There were no reductions of goodwill relating to impairments or disposal of all or a portion of a business.  The amount of goodwill related to reportable segments at September 30, 2007 was $5,748 for the Pharmaceutical Products segment, $201 for the Nutritional Products segment, $262 for the Diagnostics Products segment and $1,970 for the Vascular Products segment.

The gross amount of amortizable intangible assets, primarily product rights and technology was $9,023 as of September 30, 2007 and $8,988 as of December 31, 2006, and accumulated amortization was $3,171 as of September 30, 2007 and $2,602 as of December 31, 2006.  The estimated annual amortization expense for intangible assets is $765 in 2007, $705 in 2008, $708 in 2009, $709 in 2010 and $689 in 2011.  Intangible assets are amortized primarily on a straight-line basis over 1 to 25 years (average 11 years).

11

Notes to Condensed Consolidated Financial Statements

September 30, 2007

(Unaudited), continued

Note 14 — Restructuring Plans

(dollars in millions)

In 2007, 2006 and 2005, Abbott management approved plans to realign its worldwide pharmaceutical manufacturing operations and selected domestic and international commercial and research and development operations in order to reduce costs.  Additional charges of $77 and $39 were subsequently recorded in the first nine months of 2007 and 2006, respectively, relating to these restructurings, primarily for accelerated depreciation.  In addition, Abbott implemented facilities restructuring plans in the second quarter of 2007 related to the acquired operations of Kos Pharmaceuticals Inc., which resulted in an increase to goodwill of approximately $52.  The following summarizes the activity for restructurings:

Note 15 — Fair Value Measures

(dollars in thousands)

The following table summarizes the bases used to measure certain assets and liabilities at fair value on a recurring basis in the balance sheet:

12

Notes to Condensed Consolidated Financial Statements

September 30, 2007

(Unaudited), continued

The following table summarizes the activity for the gain sharing derivative financial instrument liability.  The adjustment to record this liability at fair value has been recorded in Other (income) expense, net for the nine months ended September 30, 2007.

For assets and liabilities that are measured using quoted prices in active markets, the total fair value is the published market price per unit multiplied by the number of units held without consideration of transaction costs.  Assets and liabilities that are measured using significant other observable inputs are valued by reference to similar assets or liabilities, adjusted for contract restrictions and other terms specific to that asset or liability.  For these items, a significant portion of fair value is derived by reference to quoted prices of similar assets or liabilities in active markets.  For all remaining assets and liabilities, fair value is derived using a fair value model, such as a discounted cash flow model or Black-Scholes model.

13

FINANCIAL REVIEW

Results of Operations

The following table details sales by reportable segment for the three months and nine months ended September 30, 2007.  Percent changes are versus the prior year and are based on unrounded numbers.

(dollars in millions)

(a)     The Pharmaceutical Products segment had an agreement with Boehringer Ingelheim (BI) to co-promote and distribute three of its products in the U.S. In 2005, Abbott and BI amended the agreement and effective January 1, 2006, Abbott no longer distributed or recorded sales for distribution activities for the BI products, although Abbott recorded a small amount of co-promotion revenue in the first quarter of 2006.

Worldwide 2007 sales compared to 2006 reflect the acquisitions of Guidant’s vascular intervention and endovascular solutions businesses on April 21, 2006 and Kos Pharmaceuticals Inc. in the fourth quarter of 2006. The sales growth in 2007 also reflects unit growth and the positive effect of the relatively weaker U.S. dollar.  The relatively weaker U.S. dollar increased third quarter 2007 consolidated net sales by 2.8 percent, Total International sales by 5.7 percent, Pharmaceutical Products segment sales by 3.0 percent and Diagnostic Products segment sales by 3.9 percent over the third quarter of 2006.  The relatively weaker U.S. dollar also increased the first nine months 2007 consolidated net sales by 2.7 percent, Total International sales by 5.5 percent, Pharmaceutical Products segment sales by 2.8 percent and Diagnostic Products segment sales by 3.9 percent over the first nine months of 2006.  The sales growth for the third quarter and nine months 2006 compared to 2005, excluding sales of BI products, reflects the acquisition of Guidant’s vascular intervention and endovascular solutions businesses on April 21, 2006. The sales growth in 2006 also reflects unit growth and the effects of exchange.  The relatively weaker U.S. dollar increased third quarter 2006 consolidated net sales by 0.9 percent, Total International sales by 2.1 percent, Pharmaceutical Products segment sales by 0.9 percent and Diagnostic Products segment sales by 1.3 percent over the third quarter of 2005. The relatively stronger U.S. dollar decreased the first nine months 2006 consolidated net sales by 0.9 percent, Total International sales by 2.0 percent, Pharmaceutical Products segment sales by 1.0 percent and Diagnostic Products segment sales by 1.7 percent over the first nine months of 2005.  Sales growth in 2007 for the Nutritional Products segment was unfavorably impacted by the completion of the U.S. co-promotion of Synagis in 2006.

14

FINANCIAL REVIEW

(continued)

A comparison of significant product group sales for the nine months ended September 30 is as follows.  Percent changes are versus the prior year and are based on unrounded numbers.

(dollars in millions)