Abbott Laboratories
Analysis
Abbott is turning itself into a device-and-diagnostics company. It is spinning off the $8.5 billion nutrition business and betting the next leg of growth on heart devices and cancer tests, just as it trimmed its own fourth-quarter sales outlook. How much of Abbott's growth now comes from Exact Sciences?
- Nutrition went from a fix-up to a spin-off in nine months.
Management called raising prices to cover costs "not sustainable" in Q4 FY2025. Nine months later nutrition, about $8.5 billion in sales, is being spun off, so Abbott's growth and margins rise without a new product selling.
- Electrophysiology is finally taking share, and its own pipeline paused it.
Volt reached full U.S. launch in August and TactiFlex Duo arrived early, pushing U.S. EP growth into the high teens. Hospitals then held off LAA orders waiting for Amulet 360, so a franchise that is taking share still got guided down. How much of fourth-quarter EP growth comes from Amulet 360?
- Growth Abbott promised for the second half kept slipping a quarter.
Q4 FY2025 guided 6.5% to 7.5% for the year; Q3 FY2026 cut that to about 6% and says 2027 starts "pretty similar to this year." Each miss has a cause, but the pattern is that acceleration is always one quarter away. What has to land in Q4 for Abbott to hit 8% growth?
- Amulet 360 relaunches Abbott into a heart device market it barely plays in. The leader holds 90% of that market, so a few points of share would restart the engine Abbott now leans on.
- Washington widens CGM coverage to type 2 patients who are not on insulin. It adds 10 million people who cannot get the sensor paid for, and none of it is in guidance, so it lands as upside.
- Cologuard keeps adding new and repeat users as care-gap programs ramp. Cancer testing already earns a high-teens operating margin, so each extra test adds profit faster than it adds sales.
- Hospitals keep waiting for Amulet 360 instead of ordering the old device. Catheter growth stays cancelled out by a shrinking stroke-prevention business, and the 2027 recovery rests on it.
- The coverage expansion for type 2 patients slips past next year. Abbott has to win diabetes patients on price alone for longer, selling more sensors for less money each.
- Separation bills and the infant-formula lawsuits stay with Abbott. The margin gain the split promises arrives long after the announcement, while the costs and court dates arrive first.
| Politician | Transaction | Amount | Traded | Filed |
|---|---|---|---|---|
Donald Trump Republican · Executive | Purchase | ≥$15K | Aug 26 | Oct 8 |
Donald Trump Republican · Executive | Purchase | ≥$1.0M | Aug 21 | Oct 8 |
Donald Trump Republican · Executive | Purchase | ≥$1K | Aug 17 | Oct 8 |
Donald Trump Republican · Executive | Purchase | ≥$100K | Jul 31 | Sep 22 |
Donald Trump Republican · Executive | Sale | ≥$1K | Jul 17 | Sep 22 |
Congressional trading data provided by QuiverQuant
How Abbott Laboratories turned $44.3B of revenue into $8.1B of operating income.
| Revenue | ||
|---|---|---|
| Medical Devices | $21.4B | ▲ 12.65% YoY |
| Diagnostic Products | $8.9B | ▼ 4.33% YoY |
| Nutritional Products | $8.5B | ▲ 0.45% YoY |
| Established Pharmaceutical Products | $5.5B | ▲ 6.58% YoY |
| Total revenue | $44.3B | |
| Gross profit | $25.0B | 56.4% |
| Operating income | $8.1B | 18.2% |