Snapshot
Abbott Laboratories reported $11.46B of revenue in Q4 2025, up 4.4% year over year, with diluted EPS of $1.01 and an operating margin of 19.6%.
- Revenue
- $11.46B
- YoY growth
- +4.4%
- Diluted EPS
- $1.01
- Operating margin
- 19.6%
What management said
- •These Non-GAAP financial measures are reconciled with the comparable GAAP financial measures in our earnings news release and regulatory filings from today, which are available on our website at abbott.com.
- •Unless otherwise noted, our commentary on sales growth refers to organic sales growth, which is defined in the press release issued earlier today.
- •We delivered top-tier margin expansion and achieved our original target of double-digit earnings growth in earnings per share despite the implementation of new tariffs and heightened market challenges in China.
- •Our announced acquisition of Exact Sciences will allow Abbott to enter and lead in the fast-growing cancer diagnostics market and adds a new high-growth business with an attractive pipeline to the Abbott portfolio.
- •As we announced this morning, we forecast the midpoint of our 2026 organic sales growth range to be 7% and the midpoint of our adjusted earnings per share range to reflect 10% growth.
- •Abbott has been in the nutrition business for more than 60 years, and with that history comes experience, not just in times of growth, but in times that require navigating challenges.
- •Our results this quarter underscore a broader challenge, which is the need to reignite volume growth, a challenge many consumer goods businesses face today.
- •We have increased prices to help mitigate the impact of higher manufacturing costs, but those price increases in the current economic environment have become a factor in constraining volume growth.
- •Higher manufacturing costs led to higher prices, which in turn are suppressing demand as consumers become increasingly more price-sensitive.
- •Our goal is to transition our business back to one with a more balanced growth profile, with volume growth playing a greater role going forward.
- •In the fourth quarter, we began implementing price and promotion initiatives to help start the process of reigniting volume growth.
- •We expect performance in the nutrition to remain challenged in the first half of the year, with a return to growth in the second half.
What went well
- •Adjusted earnings per share of $1.50 grew 12% versus the prior year, delivering the original full-year target of double-digit EPS growth despite new tariffs and heightened market challenges in China.
- •Medical devices sales grew 10.5%, with continuous glucose monitor sales up 12% in the quarter and 17% for the year, exceeding $7.5 billion and marking the third consecutive year of CGM sales growing by more than a billion dollars.
- •Adjusted operating margin reached 25.8% of sales, an increase of 150 basis points over the prior year, and adjusted gross margin expanded 20 basis points to 57.1% despite tariff impacts.
- •Established Pharmaceuticals (EPD) sales rose 7%, delivering a fifth consecutive year of sales growth exceeding 7%, with double-digit growth in India and several countries across Latin America and the Middle East.
- •Core Lab Diagnostics grew 3.5%, a third consecutive quarter of accelerating growth, and point-of-care diagnostics grew 7% driven by the high-sensitivity troponin test.
- •Achieved multiple pipeline milestones including FDA approval of the Volt PFA catheter, CE Mark for the TactiFlex Duo ablation catheter, and CMS national coverage for TriClip and CardioMEMS.
What went wrong
- •Nutrition sales declined in the quarter, with the U.S. pediatric business affected by market share loss partly tied to the prior-year loss of a large WIC contract.
- •Price increases taken to offset higher post-pandemic manufacturing costs have suppressed demand and constrained volume growth in nutrition as consumers became increasingly price-sensitive, a dynamic that worsened through the fourth quarter.
- •Diagnostics sales declined 3.5% due to the anticipated year-over-year decline in COVID testing sales.
- •Management expects nutrition performance to remain challenged in the first half of 2026 before returning to growth in the second half.
- •China weighed on diagnostics in 2025 through volume-based procurement (VBP), with the company having felt the bulk of the impact on assay categories where it held over 40%-45% market share.
Guidance changes
| Metric | Period | Previous | Current | Change |
|---|---|---|---|---|
| Organic sales growth | FY2026 | — | 6.5%-7.5% (7% midpoint) | Midpoint 0.5 points below prior consensus of 7.5%, driven by near-term nutrition outlook |
| Adjusted EPS | FY2026 | — | $5.55-$5.80 (10% growth at midpoint) | In line with consensus |
| Adjusted EPS | Q1 2026 | — | $1.12-$1.18 | — |
| Foreign exchange impact on reported sales | FY2026 | — | ~1% favorable (~3% favorable in Q1) | — |
| Adjusted tax rate | FY2026 | — | 15%-16% | — |
| Operating margin improvement | FY2026 | — | 50-70 basis points | — |
Performance breakdown
| Metric | YoY change | Reason |
|---|---|---|
| Total sales (ex-COVID) | +3.8% | Underlying business growth offset by the year-over-year decline in COVID testing sales |
| Medical devices | +10.5% | Double-digit growth in CGM, electrophysiology (double digits in U.S. and internationally), and structural heart (Navitor, TriClip, MitraClip) |
| Continuous glucose monitors | +12% (quarter), +17% (year) | Strong market fundamentals, leading cost and scale position, and continued adoption across user groups |
| Established Pharmaceuticals (EPD) | +7% | Well-balanced growth across markets and therapeutic areas, including double-digit growth in India, Latin America, and the Middle East |
| Diagnostics | -3.5% | Anticipated year-over-year decline in COVID testing sales |
| Core Lab Diagnostics | +3.5% (quarter); +7% full year excluding China | Durable demand in markets around the world; third consecutive quarter of accelerating growth |
| Point-of-care diagnostics | +7% | Adoption of the high-sensitivity troponin test for earlier and more accurate heart attack detection |
| Nutrition | declined | U.S. pediatric market share loss and price increases suppressing volume growth amid heightened consumer price-sensitivity |
Earnings call themes & trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Nutrition volume reset and pricing | Pediatric share loss flagged last quarter | Began price and promotion initiatives in Q4 plus at least eight new product launches over the next 12 months; growth challenged in H1 with return to growth in H2 | rising |
| CGM / diabetes care growth durability | Targeted ~$1 billion of incremental sales per year | Reiterated low-teens 2026 growth with penetration opportunity across all three patient groups and a non-insulin reimbursement opportunity not baked into guidance | steady |
| Electrophysiology PFA portfolio | Sustained double-digit growth in 2024-2025 without a PFA catheter | Volt launching in U.S. and TactiFlex Duo internationally in 2026, positioning a complete RF and PFA portfolio plus LAA device | rising |
| Exact Sciences acquisition | — | Shareholder vote on February 20, required clearances submitted, no change to timing or ~$0.20 dilution; adds a $3+ billion business growing ~15% in cancer diagnostics | rising |
| China diagnostics VBP headwind | ~$1 billion of diagnostics headwind (COVID plus China) in 2025 | Bulk of VBP impact felt; expected to stabilize in 2026 with limited exposure to upcoming oncology-testing VBP waves | declining |
| Margin expansion discipline | Top-tier margin expansion delivered in 2025 | Commitment to 50-70 bps annual operating margin improvement via gross margin expansion and P&L leverage | steady |
Q&A summary
Why is 2026 guidance slightly below the prior consensus you seemed comfortable with, and how does the year play out by cadence? (Wells Fargo)
The 0.5-point lower top-line midpoint (7% vs. prior 7.5% consensus) reflects only the changed near-term nutrition outlook; EPS is in line with consensus. Most of the company is sustaining high-single-digit or low-teens growth, and growth accelerates through the year as nutrition recovers in H2 and diagnostic headwinds are lapped.
How does Abbott's electrophysiology portfolio compare to competition now and over the next 6-12 months with Volt, TactiFlex Duo and other products? (Goldman Sachs)
The PFA rollout was always part of a three-year strategy; Volt's European launch has gone well, with positive feedback on mapping integration and the potential for sedation rather than general anesthesia. With both RF and PFA products, full diagnostic tools, and an LAA device, Abbott believes it has the most complete portfolio and expects to grow at least in line with the mid-to-high-teens market.
Is low-to-mid-teens the right way to think about CGM growth in 2026, and what is Abbott's market position? (JPMorgan)
Growing roughly $1 billion per year is not slowing; math implies low-teens growth, but substantial penetration remains across intensive-insulin, basal-insulin, and non-insulin users globally. A U.S. non-insulin reimbursement opportunity is progressing but is not baked into guidance, and the upcoming dual glucose-ketone sensor offers share gains and market expansion among pump users and SGLT2 patients.
What gives confidence the new nutrition price points are right, and how does nutrition's profitability fit the portfolio? (UBS)
Pricing was tested in the U.S. and internationally before Thanksgiving and early U.S. signs are encouraging, though monitoring continues. Nutrition profitability has improved and is expected to be in line with 2025, with spend shifting from brand marketing toward price and promotion over the next six months to maintain a steady profile.
What is the outlook for diagnostics in China given VBP? (Jefferies)
The bulk of VBP has been absorbed, hitting the high-share assay categories first; the next wave targets core lab oncology testing where Abbott has little share. The expectation is for China to be stable rather than high-growth, allowing the accelerating U.S., Latin America, and Europe businesses to drive mid-single-digit diagnostics growth (7%-8% excluding China).
What are the updated thoughts on Exact Sciences close timing, dilution, and broader M&A versus divestitures? (Evercore ISI)
Capital allocation centers on a growing dividend with M&A focused on medtech and diagnostics; near-term focus is closing and integrating Exact Sciences (shareholder vote February 20, no change to timing or ~$0.20 dilution). Post-close gross debt-to-EBITDA of about 2.7x leaves capacity for tuck-in deals, and management sees a large multi-cancer/early-detection opportunity if reimbursement and pricing align.