Abbott is dealing with integrating a big new buyout into its business alongside a weaker-than-expected respiratory disease season—plus ongoing issues with its nutrition unit—as its first-quarter numbers reflect its operational complexity.
The company’s first-quarter sales hit $11.16 billion, up 7.8% on a reported basis and 3.7% on what the company deems a “comparable basis.” But the medtech giant is projecting full-year 2026 adjusted diluted earnings per share (EPS) of $5.38 to $5.58, down from its former guidance of $5.55 to $5.80.
This “includes $0.20 of dilution related to the acquisition of Exact Sciences,” the company said in its April 16 financial report.
Abbott bought Exact Sciences in a $23 billion deal last November, with the cancer diagnostics specialist formally integrated into its new parent company on March 23. It’s not unusual for deals of this size to cause some financial turbulence in the first few months.
Looking into Abbott’s multiple business units, there were some hits and misses in the first quarter.
Its nutrition business continued to struggle, with sales down 6% on a reported basis to $1.94 billion. This has been an ongoing issue related to the rise in manufacturing costs in nutrition.
Abbott did, however, kick off “strategic pricing actions” in the fourth quarter, and this, together with new launches, should chip in toward “improved volume growth over the course of the year,” the company said in the report.
Worldwide Diagnostics sales were up 6.1% on a reported basis, with its CoreLab unit growing sales 3.3% on an organic basis and the newly integrated Cancer Diagnostics from Exact delivering a 13.4% increase.
Meanwhile, sales in Abbott’s Rapid and Molecular testing unit fell 9.6%, driven by the weaker respiratory season.
“If you look at the respiratory season, we forecast Q1 to be a relatively weak season compared to other seasons that we had seen in the past, and it was even weaker than what we had forecasted,” Abbott CEO Rob Ford said on a call with investors.
He added that if the company “were to make up that lower respiratory season at the back end of the year, then we would have to assume an above-average respiratory season, at least from a testing perspective, and I am only going to find that out just before Thanksgiving.”
For that reason, in terms of guidance, he said it’s “prudent not to forecast that we are going to make it up in Q4, this respiratory aspect.”
Medical Devices, meanwhile, grew sales at 8.5% on an organic basis.
Shares in the company were down 6% at the end of trading Thursday.
In a note to clients posted after the CEO’s call with investors, analysts at Evercore ISI said: “While we get the reaction today, Abbott will be one of the few large cap medtech organic growth acceleration stories into FY27. Given this, we [reiterate] our Outperform rating.”
