Abbott Laboratories saw its shares down 10% at the end of trading Thursday, Jan. 22, as the market digested weaknesses from its fourth-quarter and full-year earnings report.
Overall, fourth-quarter sales were up 4.4% year over year to $11.45 billion on a reported basis, while full-year 2025 revenue hit $44.3 billion, up 5.7% on a reported basis. But those top-line figures belie several issues.
Within the company, Abbott’s nutrition business was a major drag, with fourth-quarter sales down 8.9% worldwide to $1.94 billion and down more than 13% in the U.S., with pediatric sales down 18% in the U.S.
On a call with investors Thursday, CEO Robert Ford said “the U.S. pediatric business is seeing an impact from market share loss partly due to the loss of a large WIC [U.S. government] contract last year.”
The results “underscore a broader challenge, which is the need to reignite volume growth, a challenge many consumer goods businesses face today,” the CEO said.
This, he explained, is related to the rise in manufacturing costs in nutrition, “in part due to a post-pandemic driven surge in commodity costs that remains in our cost base today.”
“We’ve 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,” the CEO said.
In Abbott’s global diagnostics unit, fourth-quarter sales hit $2.45 billion, down 2.5%, though this was just down 0.2% when excluding COVID testing products.
Global core laboratory diagnostics sales remained a bright spot as they did in the previous quarter, growing in the fourth quarter by 5.3%, though this “was partially offset by challenging market conditions in China,” the company said.
The rapid diagnostics division was down 17.85% for the quarter with sales of $697 million, with the result driven by a “weak flu season,” according to a note from Evercore ISI analyst Vijay Kumar. For the full year, total global diagnostics sales fell 4.3% to $8.93 billion.
In diabetes care, sales of continuous glucose monitors (CGMs) grew 12% in the fourth quarter and 17% for the year.
“Our success in CGM continues to be driven by strong underlying market fundamentals, a leading position in cost and scale, and an unwavering commitment to market-leading innovation,” Philip Boudreau, Abbott’s chief financial officer, said on the call.
But there are issues here too. In his note to clients, Evercore ISI’s Kumar wrote that Abbott’s Libre CGM franchise appeared to be hit by a “slowdown” during the quarter. In the third quarter, the franchise posted 17% growth, the analyst pointed out, so the fourth-quarter numbers led Kumar to wonder whether Abbott was seeing an “impact from [the] recall?”
Related
in November, Abbott launched an effort to replace some of its FreeStyle Libre 3 CGMs—following reports of hundreds of injuries and seven deaths worldwide—after some sensors showed they may provide incorrect readings that could prompt users to skip insulin doses.
Libre falls within Abbott’s medical devices segment, which saw fourth-quarter sales hit $5.67 billion, up 12.3% year over year. This business also includes products in electrophysiology, rhythm management, heart failure and structural heart, which all grew sales during the period.
Full-year sales for the segment were up 12.6% to $21.38 billion.
Evercore ISI’s Kumar said Abbott’s issues were “company specific and should not be a readthrough for Medtech.”
