Abbott Laboratories Bets on Devices in 2026 Call

Abbott Laboratories ((ABT)) has held its Q1 earnings call. Read on for the main highlights of the call.

Abbott Laboratories’ latest earnings call struck a cautiously upbeat tone, blending steady growth and strong device momentum with clear acknowledgment of near‑term pressures. Management underscored the strategic value of the Exact Sciences acquisition, a solid innovation pipeline, and an expected second‑half acceleration, even as weak respiratory testing, China pricing pressure, and EPS dilution temper 2026 results.

Adjusted EPS and Refined Profit Outlook

Adjusted EPS reached $1.15 in Q1 2026, rising 6% year over year and signaling resilient profitability despite pockets of softness. For Q2, Abbott guided EPS to $1.25–$1.31 and trimmed full‑year adjusted EPS midpoint to $5.48, baking in roughly $0.20 of dilution from the Exact Sciences deal and earlier‑than‑planned financing costs.

Comparable Sales Growth Rebounds, Outlook Intact

First‑quarter sales rose 3.7% on a comparable basis, a solid start considering respiratory testing drag and lingering China pressures. For 2026, management maintained confidence in a 6.5%–7.5% comparable sales growth range, assuming a broad‑based contribution from devices, diagnostics, and the newly consolidated Exact Sciences assets.

Exact Sciences Deal Adds Scale and Growth

Abbott closed the Exact Sciences acquisition on March 23, 2026, and expects about $3 billion in incremental 2026 sales from the transaction. Executives framed the asset as a key driver of long‑term growth, with integration progressing well under dedicated leadership and standalone reporting within Diagnostics to preserve focus and accountability.

Medical Devices Deliver Broad‑Based Strength

Medical Devices posted 8.5% sales growth in Q1, underscoring this segment as Abbott’s primary growth engine. Electrophysiology and Rhythm Management both climbed 13% while Heart Failure grew 12%, marking the third straight quarter of double‑digit Rhythm growth and supporting the company’s confidence in continued device outperformance.

Cancer and Core Lab Diagnostics Gain Traction

Cancer Diagnostics rose 13% on a comparable basis, driven by Cologuard’s mid‑teens U.S. performance and high‑teens international expansion. Core Lab Diagnostics grew 3%, supported by demand in the U.S., Europe and Latin America, and management reiterated expectations for mid‑single‑digit Core Lab growth over the full year despite China uncertainty.

EP Product Launches Accelerate Growth Prospects

In Electrophysiology, approvals and limited‑market launches for two PFA catheters came earlier than expected, with Volt in the U.S. and TactiFlex Duo in Europe drawing positive early feedback. Abbott expects these launches to accelerate EP growth and help the business outpace market exit rates, reinforcing its competitive position in cardiac ablation.

CGM Scale Today, Larger Market Tomorrow

Continuous glucose monitoring generated $2.0 billion in Q1 revenue, up 7.5%, with management projecting a return to double‑digit growth in Q2. Abbott highlighted a long‑run global CGM opportunity of 70–80 million people compared with an installed base of about 10–12 million, and sees pending reimbursement changes potentially unlocking roughly 10 million additional covered lives.

Pipeline and R&D Underpin Future Growth

Management pointed to several R&D milestones, including completion of enrollment in the Catalyst LAAC trial and the start of extravascular ICD development. A positive randomized trial for Libre in type 2 diabetes on basal insulin, plus upcoming platforms such as balloon‑expandable TAVR, leadless conduction pacing, Cephea mitral replacement, peripheral IVL and a wearable lactate sensor, underscore Abbott’s innovation depth.

Foreign Exchange Offers Modest Tailwind

Foreign exchange boosted Q1 sales by roughly 4%, helping offset operational headwinds in some geographies. For 2026, FX is expected to add about 1% to reported sales while remaining roughly neutral in Q2, suggesting investors should focus primarily on underlying volume and mix trends rather than currency swings.

Rapid and Molecular Diagnostics Face Respiratory Slump

Rapid and Molecular Diagnostics sales fell 10% on a comparable basis as an unusually weak respiratory season sharply reduced virus testing. Management noted that its 2026 guidance does not assume a snap‑back in respiratory testing volumes, creating potential upside if conditions normalize but also near‑term pressure if demand remains muted.

Nutrition Navigates Volume Recovery and Pricing Reset

Nutrition finished only slightly ahead of expectations, but sales volumes were lower than a year ago, reflecting the impact of prior pricing decisions. Abbott implemented strategic pricing actions in 2025 to rebalance price and volume, and while early signs of volume recovery are emerging, management emphasized that the transition remains a work in progress.

Exact Sciences Deal Brings Short‑Term EPS Drag

The Exact Sciences acquisition, though strategically attractive, will modestly weigh on 2026 profitability. Abbott reduced its full‑year adjusted EPS midpoint by $0.20 versus its prior outlook, citing dilution from the transaction and front‑loaded financing costs that were absorbed in the first quarter.

China VBP Overhang Eases but Still Lingers

China’s volume‑based procurement program has been a sizeable headwind, with management reminding investors of roughly $1 billion of impact in the prior year. Core Lab sales in China were flat in Q1, a relative improvement from deeper past declines, but Abbott is still modeling a single‑digit decline for 2026 as further VBP waves roll through a portfolio that is already about 80% exposed.

CGM Near‑Term Noise Masks Broader Story

The CGM business grew 7.5% in Q1, short of double‑digit levels due partly to an international tender renewal delay and tough comparisons following last year’s shelf restocking. While analysts flagged weaker weekly U.S. prescription trends, management pointed investors to broader global growth drivers and upcoming access catalysts as more important than temporary tender timing.

Structural Heart Faces U.S. Execution and Competition

Structural Heart encountered execution challenges in the U.S. and rising competition, particularly in the mitral segment, pressuring growth and share. Abbott reorganized by moving LAAC into Electrophysiology, a shift that creates some transitional reporting noise but is aimed at sharpening focus and improving U.S. commercial execution over time.

Respiratory Season Left as an Unmodeled Wildcard

Management explicitly chose not to build a stronger‑than‑normal respiratory season into its 2026 forecast, despite the unusually weak Q1 baseline. That conservative posture may leave upside to sales and earnings if respiratory testing rebounds later in the year, but near‑term results could underwhelm investors expecting a quicker recovery.

Guidance Signals Steady Growth with Upside Optionality

Abbott’s updated 2026 outlook calls for 6.5%–7.5% comparable sales growth, including about $3 billion from Exact Sciences, and Q2 EPS of $1.25–$1.31. With FX providing a modest tailwind and Q1 operating metrics—such as a 56.3% adjusted gross margin and balanced R&D and SG&A spending—management is signaling confidence in execution while still framing respiratory testing and China as key swing factors.

Abbott’s earnings call painted a picture of a diversified healthcare company leaning on device strength and a deep pipeline to offset pockets of weakness in diagnostics, China and Nutrition. While the Exact Sciences deal trims near‑term EPS, management’s conviction in second‑half acceleration and multi‑year growth drivers suggests that patient investors could be rewarded as integration advances and end‑markets normalize.