Abbott Laboratories (NYSE:ABT) detailed fourth-quarter 2025 results and outlined its 2026 outlook on its earnings conference call, emphasizing continued momentum in medical devices, a transition plan to restart volume growth in nutrition, and an expected acceleration in diagnostics as several prior-year headwinds ease.
2026 guidance: 7% organic growth midpoint, 10% EPS growth midpoint
Chairman and CEO Robert Ford said Abbott expects the midpoint of its 2026 organic sales growth range to be 7% and the midpoint of its adjusted earnings per share (EPS) range to reflect 10% growth. CFO Phil Boudreau provided formal guidance for full-year 2026 adjusted EPS of $5.55 to $5.80, with first-quarter adjusted EPS expected to be $1.12 to $1.18. Abbott forecast 6.5% to 7.5% organic sales growth for 2026.
During Q&A, Ford addressed why the top-line midpoint was slightly below prior consensus he referenced from the October call, attributing the change primarily to the near-term outlook for nutrition, while reiterating that much of the portfolio is sustaining high single-digit growth or accelerating. Ford also said Abbott is not baking potential U.S. reimbursement expansion for non-insulin CGM users into guidance, describing it as an upside opportunity if it materializes.
Fourth-quarter profitability: operating margin expansion despite tariffs
Boudreau reported that adjusted EPS in the fourth quarter was $1.50, up 12% year over year. On the margin line, Abbott posted adjusted gross margin of 57.1% of sales, up 20 basis points despite tariff impacts. Adjusted operating margin was 25.8%, an increase of 150 basis points from the prior year.
For expense lines, adjusted R&D was 6.2% of sales and adjusted SG&A was 25.1%. Boudreau said the company continues to target annual operating margin improvement of 50 to 70 basis points through a combination of gross margin expansion and leverage in the P&L where appropriate.
Segment performance: nutrition pressured; devices strong; diagnostics lapping COVID and China headwinds
Ford said Abbott’s 2025 included “top-tier margin expansion” and that the company hit its original target of double-digit EPS growth despite new tariffs and challenges in China. He also highlighted multiple 2025 milestones, including approvals for Volt and TactiFlex Duo in electrophysiology, a new indication for Navitor, national coverage decisions for TriClip and CardioMEMS, and key trial progress across cardiovascular programs.
- Nutrition: Sales declined in the quarter. Ford said the U.S. pediatric business continues to be impacted by market share losses tied in part to the loss of a large WIC contract. More broadly, he described a consumer packaged goods-like dynamic: elevated manufacturing and commodity-driven costs have remained in the cost base, and price increases used to offset costs are now constraining volume growth as consumers become more price-sensitive. Abbott began implementing price and promotion initiatives in the fourth quarter and is increasing focus on innovation, including a plan to launch at least eight new products over the next 12 months. Ford expects nutrition to remain challenged in the first half and return to growth in the second half.
- Diagnostics: Sales declined 3.5%, driven by an expected year-over-year drop in COVID testing revenue. Ford said Core Lab Diagnostics grew 3.5% in the quarter, its third straight quarter of accelerating growth; for the full year, Core Lab growth was 7% excluding China. Point-of-care diagnostics grew 7%, helped by adoption of Abbott’s high-sensitivity troponin test.
- Established Pharmaceuticals Division (EPD): Sales increased 7% in the quarter, with Ford citing balanced growth across markets and therapeutic areas, including double-digit growth in India and several countries across Latin America and the Middle East. He said EPD delivered its fifth consecutive year of sales growth exceeding 7% and pointed to biosimilar launches in emerging markets as an added growth driver.
- Medical devices: Sales grew 10.5%. In diabetes care, continuous glucose monitoring (CGM) sales grew 12% in the quarter and 17% for the year, with 2025 sales exceeding $7.5 billion. Ford also highlighted double-digit growth in electrophysiology and structural heart, and 12% growth in heart failure.
Medical devices: CGM scale, EP “toolbox,” and structural heart catalysts
In diabetes, Ford pushed back on the idea that the CGM market is slowing, arguing that “growing $1 billion every single year” remains strong. He said Abbott sees significant remaining penetration opportunity across intensive insulin, basal insulin, and non-insulin patient segments globally, and discussed progress toward potential U.S. reimbursement expansion for non-insulin users while emphasizing it is not included in the company’s guidance.
Ford also discussed Abbott’s dual glucose-ketone sensor program, noting the company has filed for FDA approval and sees the product as an opportunity for both share capture and market expansion, including among SGLT2 users.
In electrophysiology, Ford said Abbott has sustained double-digit growth even before launching a PFA catheter. He described positive feedback from Europe on Volt, including mapping integration and the potential to perform procedures with sedation rather than general anesthesia. Looking ahead, he framed Abbott’s strategy as a “toolbox approach,” offering both Volt’s design and the dual-energy TactiFlex Duo catheter to give physicians choice, alongside related mapping, diagnostic, and access products and Abbott’s left atrial appendage (LAA) device.
In structural heart, Ford cited double-digit growth in Navitor, TriClip, and MitraClip, and said Abbott expects to complete enrollment in its CATALYST trial evaluating Amulet versus oral anticoagulants in atrial fibrillation patients. He also pointed to TriClip approval in Japan and said Abbott expects to launch a next-generation Amulet in early 2027, begin an IDE trial for a balloon TAVR program in the second half of 2026, and start an IDE trial for a femoral transseptal mitral valve replacement program.
Exact Sciences acquisition and capital allocation priorities
Ford reiterated that the announced acquisition of Exact Sciences is intended to add a new “growth vertical” in cancer diagnostics. He said Abbott’s focus is on closing and integrating the deal, noting a shareholder vote is scheduled for Feb. 20 and that the company is not changing its assumptions on timing or dilution. Ford said Abbott expects gross debt-to-EBITDA of about 2.7x after close, which he described as leaving “plenty of capacity,” though near-term M&A focus would be on integration and potentially smaller tuck-in opportunities.
On capital allocation, Ford reiterated Abbott’s commitment to a growing dividend and said M&A focus remains primarily in medtech and diagnostics. He said he does not view external business development as necessary to execute the nutrition strategy, which he characterized as a pricing, promotion, and innovation-led effort to restore volume-driven growth.
Ford concluded that Abbott entered 2026 with a productive pipeline, multiple businesses sustaining high single-digit to teens growth, expected inflections in areas like core lab diagnostics and electrophysiology, and a nutrition transition that management views as a near-term reset to support longer-term performance.
About Abbott Laboratories (NYSE:ABT)
Abbott Laboratories is a global healthcare company headquartered in Abbott Park, Illinois, that develops, manufactures and markets a broad portfolio of medical products and services. Founded in 1888, Abbott operates through multiple business areas that focus on diagnostics, medical devices, nutritionals and established pharmaceuticals. The company supplies hospitals, clinics, laboratories, retailers and direct-to-consumer channels with products intended to diagnose, treat and manage a wide range of health conditions.
In diagnostics, Abbott provides laboratory and point-of-care testing platforms and assays used to detect infectious diseases, chronic conditions and biomarkers; its Alinity family of instruments and rapid-test solutions are examples of this capability.
