On Thursday, shares of Abbott Laboratories (NYSE: ABT) declined sharply, reaching a 52-week low after the company disclosed its financial performance for the fourth quarter of 2025 and articulated its earnings projections for the first quarter of 2026. The quarterly sales revenue of $11.46 billion came in slightly below the analyst consensus estimate of $11.80 billion, contributing to the negative sentiment among investors.
Reported sales reflected a 4.4% increase compared to the previous year, with a 3% gain on an organic basis. When excluding revenues related to COVID-19 testing, the organic sales growth rose to 3.8%. Adjusted earnings per share were consistent with Wall Street expectations at $1.50.
Robert Ford, Abbott’s chairman and CEO, emphasized the company’s strategic progress during 2025. He highlighted margin expansion, double-digit earnings per share growth, a productive pipeline of new products, and key strategic initiatives positioning Abbott for accelerated growth in 2026.
Segment Performance Highlights
Medical Devices: This segment experienced robust growth of 12.3% on a reported basis and 10.4% organically, generating sales of $5.68 billion. The increase stemmed from strong double-digit growth in electrophysiology, heart failure management, diabetes care, and rhythm management. Notable recent developments include a collaboration initiated in January with AtaCor Medical to advance an investigational extravascular implantable cardioverter defibrillator (EV-ICD) system. Furthermore, the U.S. Food and Drug Administration (FDA) granted approval in December 2025 for Abbott’s Volt PFA System designed for atrial fibrillation treatment.
Diabetes Care: Within this category, sales of continuous glucose monitors reached $2.0 billion, reflecting a 15% increase in reported terms and 12.2% organic growth. However, the FDA issued a safety alert in December regarding the FreeStyle Libre 3 sensors after reports linked the devices to seven deaths and numerous serious injuries.
Global Diagnostics: Sales totaled $2.46 billion, marking a 2.5% decrease on a reported basis and a 3.6% organic decline. After excluding COVID-19 testing revenues, which amounted to $89 million in the quarter (down from $176 million a year earlier), the segment’s sales decreased marginally by 0.2%. The Global Core Laboratory Diagnostics sub-segment showed a 5.3% increase on a reported basis and 3.6% growth organically. Despite this, growth was partially offset by headwinds in China arising from volume-based procurement programs and overall challenging market conditions.
Worldwide Nutrition: This segment’s sales declined by 8.9% on report and 9.1% on an organic basis, totaling $1.94 billion. The downturn primarily resulted from decreased sales volumes relative to the prior year, alongside strategic pricing actions aimed at fostering volume growth in the upcoming periods. Abbott anticipates volume recovery through the introduction of multiple new products slated for launch in 2026.
Established Pharmaceuticals: Sales increased 9% reported and 7% organically to $1.38 billion. In a major corporate development, Abbott completed a $21 billion acquisition of cancer screening company Exact Sciences Corp (NASDAQ: EXAS) in November 2025, marking the healthcare sector’s largest deal of the year.
Financial Outlook and Market Reaction
Turning to guidance, Abbott projected adjusted earnings per share for the first quarter of 2026 between $1.12 and $1.18, falling short of the consensus estimate of $1.20. For the full fiscal year 2026, the company anticipates adjusted earnings in the range of $5.55 to $5.80 per share, slightly diverging from the Wall Street consensus of $5.67. Organic sales growth is forecasted between 6.5% and 7.5% for the year.
Investors responded to the earnings release and guidance by driving Abbott’s stock down 7.37%, with shares trading at $111.63 at the time of reporting. This marks the stock’s weakest level over the preceding 52 weeks.
Key Points
- Fourth-quarter sales of $11.46 billion missed analyst expectations.
- Medical Devices and Diabetes Care segments delivered double-digit growth.
- Diagnostics and Nutrition segments experienced declines, impacted by challenging market conditions and regulatory alerts.
- First quarter 2026 earnings guidance lowered, contributing to a sharp decline in share price.
Risks and Uncertainties
- Regulatory challenges illustrated by FDA safety alert on FreeStyle Libre 3 sensors.
- Market pressures in China from volume-based procurement impacting Diagnostics sales.
- Lower-than-expected earnings outlook for the first quarter of 2026 may affect near-term investor sentiment.
- Strategic price adjustments in the Nutrition segment may impact volume and revenue recovery timelines.