Abbott Laboratories

Abbott said third quarter sales increased 7% on a comparable basis and adjusted EPS was $1.42, in line with guidance and consensus. Adjusted gross margin was 57.2% of sales, up 140 basis points year over year; operating margin was 23.4%, up 40 basis points. Diagnostics sales rose 6.5%, nutrition sales rose 5%, EPD sales rose 8.5%, and medical devices sales rose 8%. Management said foreign exchange was a 0.4% headwind to Q3 sales. For Q4, Abbott expects approximately 1% negative FX impact on sales and guided adjusted EPS to $1.62 to $1.67. The company did not give full-year sales guidance on the call, but management indicated the prior-year-profile nutrition separation should leave Abbott with sales growth up 50 to 100 basis points, gross margin more than 200 basis points higher, and operating margin about 100 basis points higher versus the current combined portfolio.

Robert Ford framed the nutrition spin as a strategic step to let both businesses grow faster and more effectively on their own, saying the nutrition market has changed and now requires different investment and operating priorities. He emphasized that nutrition is being separated from a position of strength, with about $8.5 billion in annual sales, and described Abbott’s post-spin portfolio as higher growth and higher margin. His tone was confident and upbeat, repeatedly stressing innovation, pipeline strength, and long-term value creation.

Phil Boudreau focused on the mechanics of the separation and the financial setup, saying it will be a planned tax-free distribution to Abbott shareholders and is expected to close by the end of next year, subject to approvals. He said Abbott expects separation costs to be treated as specified items and excluded from adjusted earnings, and that both companies will be structured to maintain investment-grade ratings. On the quarter, he cited 57.2% adjusted gross margin, 26.9% adjusted SG&A, 6.9% adjusted R&D, and 23.4% operating margin, noting gross margin improved 140 basis points year over year on favorable mix, Exact Sciences, and operational discipline.

Analysts pressed on the nutrition spin, NEC litigation, and whether the business separation changes Abbott’s growth outlook. Ford said litigation does not need to be fully resolved before the separation and that both companies will be well capitalized, while he reiterated confidence in Abbott’s legal position. On guidance, he said the Q4 and 2027 outlooks are being shaped mainly by EP and diabetes: EP is seeing a temporary LAA-related headwind, while diabetes faces slower CGM growth from limited reimbursement expansion and more international price pressure. He also addressed cancer diagnostics, saying the July cybersecurity event trimmed about a point of growth, that Cologuard Plus reimbursement should not go down, and that the new blood-based CRC test has a different margin profile and should widen Abbott’s screening portfolio.