Abbott (ABT) Q3 2026 earnings review
Abbott grows faster, but it lowers its full-year sales target
Abbott's sales grew faster, yet the company lowered its target for the year and announced a nutrition spin-off. Sales from businesses it owned a year ago rose 7%, with all four segments growing. Chief executive Robert Ford called the results strong, but the lowered plan needs about 8% growth in the fourth quarter by our math, where the old one needed about 12%.
| Sales from businesses owned a year ago | +7.0% 4.8% in the second quarter |
|---|---|
| Profit per share, excluding one-offs | $1.42 +9% from a year ago |
| Full-year sales outlook | Cut to about 6% 6.5%–7.5% in July |
| Full-year profit outlook | Unchanged at the middle $5.50–5.55, narrowed |
⚖️ Verdict: 🔴 Bearish
The story got worse because the second-half acceleration Abbott had promised arrived at a smaller size than planned, and the company cut its sales target rather than defend it. Glucose monitors slowed again. The good news: nutrition sales turned positive after three quarters of decline, and heart rhythm devices rose 15%.
The question now is whether Abbott's devices can grow near 8% a year once nutrition leaves and glucose monitors sit below that rate. One answer is that the new catheters and the Libre Duo sensor lift devices back toward double digits in 2027; the other is that monitors keep slowing and devices settle in the mid-single digits. The fourth quarter's device growth and the 2027 outlook in January will tell.
🐂 Bull Case
Nutrition Sales Grow Again After Three Quarters of Decline
Abbott's nutrition business sells infant formula under Similac, children's shakes under PediaSure and adult shakes under Ensure and Glucerna. Its sales fell for three quarters after the company cut prices and spent on promotions late last year to win back volume, and management said in January that the recovery would show in the second half.
This quarter it did. Nutrition sales rose 5% from a year ago, to $2.26 billion. That is $118 million more than in the second quarter. Children's products led, up 9%, and the US business grew 8%, so the gain is not confined to one market.
The comparison was not easy, because nutrition sales rose about 4% in the same quarter last year, before the price cuts. So the result reflects volume coming back rather than a weak base. In August Abbott also launched a Similac formula made with whole milk, one of the products it had promised for the second half.
What to watch: the nutrition growth rate in the fourth quarter, when it laps a 9% fall a year earlier. A rate far above this quarter's 5% would mean the easy comparison is doing the work rather than new volume.
Heart Rhythm Devices Grow 15% and Win Two Approvals
Electrophysiology is Abbott's business in catheters that treat irregular heartbeats by destroying small areas of heart tissue, and it is the fastest-growing line in medical devices. The rest of the device portfolio did not keep up with it this quarter, because glucose monitors and structural heart pulled the average down.
- Electrophysiology: up 15.5% like for like, to $873 million
- Rhythm management (pacemakers and defibrillators): up 10%
- Medical devices overall: up 7.4% excluding currency, from 7.9% in the second quarter
- Structural heart in the US: down 2.3%, after a 9.6% fall in the second quarter
- Neuromodulation: down 1.1%
In September the FDA approved TactiFlex Duo, a catheter that delivers two kinds of energy, pulsed field and radiofrequency, from one device. In August Europe approved Amulet 360, a device that seals off the pocket in the heart where clots form. Both go to the line already growing fastest, so they add to a strength rather than fix a weakness.
What to watch: medical device growth excluding currency in the fourth quarter, once TactiFlex Duo is selling in the US. A rate back above 8% would mean the new catheters are large enough to offset slower glucose monitors.
Cancer Tests Grow 14% and Abbott Adds a Blood Test
Cancer diagnostics is the business Abbott bought in March with Exact Sciences, maker of Cologuard, a stool test for colon cancer. Management said in July that the second half would grow faster than the first half, which ran at about 13%.
Sales reached $968 million this quarter, up 13.8% against what Exact Sciences sold on its own a year earlier. Cologuard did most of the work, the company said, with help from the precision oncology and international businesses. The rate sits only a little above the first half, so the promised step-up is small so far.
In September Abbott launched SimpleScreen CRC, a blood-based colorectal cancer screening test the FDA approved for average-risk adults aged 45 and over. That matters because blood tests compete with Cologuard for the same patients, and Abbott now sells both, so a patient who refuses the stool test can stay with the company.
What to watch: cancer diagnostics growth in the fourth quarter, when health systems run their screening programs hardest. A rate in the mid-teens would mean the business is on the path Abbott paid $20.6 billion for; another 14% would mean the second-half lift did not come.
🐻 Bear Case
Abbott Cuts Its Sales Target for the Year
"Abbott delivered strong third-quarter results, reflecting balanced growth across our portfolio," chief executive Robert Ford said. Sales from businesses Abbott owned a year ago rose 7.0%, up from 4.8% in the second quarter and the fastest rate this year. Every one of the four segments grew.
In the same release the company lowered its target for the year to about 6%, from a range of 6.5% to 7.5% it had repeated in April and July. The cut is the news, because management held that range through a weak first half while telling investors the second half would deliver. By our math the old range needed second-half growth of 8.6% to 10.5%, and the new target implies about 7.6%.
The release headline says Abbott reaffirms its profit outlook, and it does, because the profit range narrowed around the same middle. But sales carried the earlier plan. Abbott missed its sales target in 2025 on the same pattern of counting on the back half, and it has now trimmed the 2026 one in the quarter meant to prove the plan.
What to watch: fourth-quarter growth in sales from businesses owned a year ago against the roughly 8% the new target implies, with the weakest quarter of 2025 as the base. A reading short of that would mean even the lowered plan leaned on the comparison.
Glucose Monitor Growth Slows for a Sixth Quarter
Diabetes care, mainly the FreeStyle Libre sensor that reads blood sugar through the skin, is Abbott's largest product line at 17% of sales. In July Ford said growth would run at 8% to 9% until a large market expanded insurance coverage, and that he could not say when that would happen.
This quarter the line came in below that level. The slowdown has now run for six straight quarters, and the hard comparison explains only part of it.
- Sensor sales, like-for-like growth: 7.7%, from 9.5% in the second quarter
- Diabetes care, reported growth: 6.2%, from 10.4% in the second quarter
- The same quarter last year: diabetes care grew 16.2%, a demanding base
- Six quarters ago the growth rate was 20%
Libre Duo, which the FDA approved in August as "the world's first dual glucose-ketone biowearable sensor", adds a feature for existing users rather than a new market. Coverage expansion remains the only accelerator management names, and the company has not announced one. So the growth rate keeps falling while the thing that would lift it stays outside Abbott's control.
What to watch: sensor growth in the fourth quarter, which laps a 14.5% quarter and so gets no easier. A rate below 7% would mean the line is settling into mid-single digits just as the separation leaves devices as most of Abbott.
Deal Costs and a Settlement Halve Reported Profit
Abbott reports two profit figures. The one excluding what the company calls specified items rose 9% per share, to $1.42. The gap between the two has never been wider in the period we follow. Under standard accounting, profit fell 44% to $0.53 per share, the second quarter in a row at that level.
- Amortization of acquired intangible assets: $841 million, double a year ago
- Net interest expense: $297 million, against $44 million, on the debt raised for Exact Sciences
- Legal settlements: about $670 million to resolve the Gill case and claims for about 2,000 more infants over a premature-infant formula linked to a bowel disease
- Tax: about $100 million more from an adjustment to an earlier deferred tax benefit, a charge that has recurred every quarter this year
The interest and amortization will not go away, because they come from the $20 billion of debt and the intangible assets the acquisition created. The settlement bounds part of a litigation risk Abbott had said it could not estimate. But the release does not say whether other cases remain, and a separate agreement with the Department of Justice over the Sturgis plant added about $400 million earlier this year.
What to watch: the litigation note in the quarterly filing, for whether a reserve now covers the remaining infant formula claims. A stated range would mean the exposure is bounded at last; another statement that Abbott cannot estimate it would mean the $670 million bought only part of the way out.
Risks This Quarter Didn't Answer
Four standing concerns got no new numbers, or only partial ones, because Abbott published a release and a separation deck but no filing or transcript with these materials. Each one names the reading that would move it.
- Structural heart in the US: down 2.3%, better than the second quarter's 9.6% fall; management's claim of a recovery by year-end gets its test in the fourth quarter.
- Nutrition profitability: the segment margin that fell in the first half is not in the release; the separation deck puts the standalone operating margin near 18% excluding one-offs, a figure that includes allocated corporate costs and so does not compare.
- Tax disputes: the $1.05 billion of IRS assessments for 2017 to 2020 and the Malaysian case get no mention; the filing's tax note will show any change.
- Growth of the Abbott that existed before Exact Sciences: still not published; by our math, removing cancer diagnostics leaves the rest of the company growing about 6.5% rather than 7%.
👓 Other Themes
Abbott Will Spin Off Nutrition by the End of 2027
Abbott plans to give shareholders stock in a separate nutrition company by the end of 2027, tax-free. The new company would have about $8.5 billion in sales and an operating margin near 18%, with Daniel Salvadori, who runs the unit today, as chief executive. The remaining Abbott keeps devices, diagnostics and medicines. It expects the split to add half a point to a point to its growth rate and about a point to its operating margin, and Ford said it "will benefit both companies". The 2026 plan does not change.
Currency Took Less From Sales Than Abbott Planned
In July management said exchange rates would take about 1% from third-quarter sales. The actual drag was 0.3 percentage points, so reported growth and growth excluding currency almost matched. The drag fell hardest on established pharmaceuticals, Abbott's branded generic medicines business, where it cut 1.6 points from a line sold only in emerging markets.
💲 Other KPIs
Up 1.4 points from a year ago, though below the second quarter. The cost of making products fell to 42.8% of sales from 44.2%, and that is the whole gain. Selling costs and research each took back about half a point. So the operating margin excluding one-offs reached 23.4%, up half a point from a year ago.
Down 0.6% from a year ago and 5 million from the second quarter, the third straight quarterly fall. The count had stayed flat through 2025. Abbott bought back about $1 billion of stock in the first half, and the lower count added less than a point to profit-per-share growth of 9%.
Abbott's branded generic medicines business, sold only outside the US, grew 8.4% like for like. The rate has held between 7% and 9% for five quarters. Key emerging markets, led by India, rose 10.9%. Currency cut 1.6 points, so the reported figure is 6.8%.
🔮 Guidance
Cut. The year's plan now calls for about 6% growth in sales from businesses owned a year ago, where July's plan said 7% at the middle. The cut lands in the quarter Abbott had pointed to for a second-half step-up. By our math it leaves about 8% for the fourth quarter, where the old plan needed about 12%. That quarter laps the weakest period of 2025, so the comparison helps.
Unchanged at the middle. Abbott narrowed the range to $5.50–5.55 and kept the middle at $5.525. That works out to about 7% profit growth for the year, below the 9% delivered this quarter. The company has landed on or above the middle of its quarterly profit range for five quarters running. If the pattern holds, the year ends near $5.54 by our math.
New. Abbott plans $1.62 to $1.67 for the fourth quarter, about 10% growth from a year ago at the middle. By our math the July full-year range already pointed to that figure, so the new plan adds nothing beyond it. Getting there needs the roughly 8% sales growth the company's own sales plan implies for the quarter, with the gross margin holding.
❓ Key Questions
What changed between July and October to cut the sales target?
Sales growth reached 7% yet the full-year target fell by a point. The release does not say which business is behind the cut, and by our math the fourth quarter now needs about 8%.
How fast is Abbott growing without Exact Sciences?
Like-for-like growth counts a year of Exact Sciences sales on both sides. By our math the rest of the company grew about 6.5%; Abbott has not published that figure in any quarter since the deal closed.
Did $670 million settle every infant formula claim?
The charge covers the Gill case and about 2,000 more infants. Whether other cases remain, and whether a reserve now covers them, decides if the risk is bounded.
How will SimpleScreen CRC sit beside Cologuard?
Abbott now sells both a stool test and a blood test for colon cancer. Without a transcript we cannot read how management ranks them, or whether the blood test takes Cologuard patients.
What will Nutrition earn alone, and what will the split cost?
The deck shows an 18% operating margin excluding one-offs with corporate costs allocated, while the segment margin fell in the first half. One-time separation charges are not yet quantified.