Abbott Laboratories Earnings - Q1 2026 Analysis & Highlights
Abbott Laboratories reported Q1 2026 results aligned with expectations, highlighted by the completion of the Exact Sciences acquisition, strategic pipeline achievements in medical devices, and early signs of recovery in the Nutrition business, though near-term headwinds from a weaker respiratory season and ongoing China diagnostics challenges tempered near-term growth.
Key Financial Results
Adjusted earnings per share of $1.15, consistent with guidance despite absorbing earlier-than-planned financing costs related to the Exact Sciences acquisition and a weaker-than-expected respiratory season.
Sales increased 3.7% on a comparable basis in Q1 2026, with adjusted earnings per share growing 6% compared to the prior year.
Foreign exchange had a favorable year-over-year impact of 4% on first quarter sales, as the US dollar weakened compared to exchange rates at the time of the January earnings call.
Adjusted gross margin profile was 56.3% of sales, adjusted R&D was 6.7% of sales, and adjusted SG&A was 29.3% of sales.
Business Segment Results
Diagnostics sales increased 2% on a comparable basis, with Core Lab Diagnostics growth of 3% driven by growth in the US, Europe, and Latin America.
Core Lab diagnostic tests sales increased on both a year-over-year and sequential basis, with a trend expected to continue and drive higher growth in the second half of the year compared to the first half.
Rapid and Molecular Diagnostics sales declined 10%, reflecting lower demand for respiratory virus testing due to a much weaker respiratory season compared to last year.
Cancer Diagnostics sales grew 13% on a comparable basis, driven by mid-teens growth of Cologuard and high-teens growth in international markets.
Nutrition sales finished slightly ahead of expectations for the quarter, reflecting lower sales volumes compared to the prior year and the effect of strategic pricing actions implemented in Q4 2025.
EPD pharmaceutical business sales increased 9% in the quarter, with broad-based growth across markets including double-digit growth in several countries across Latin America and Asia Pacific regions.
Medical Devices sales grew 8.5%, led by strong performance in cardiovascular device businesses.
Electrophysiology growth of 13% included contributions from two pulsed field ablation catheter launches, with the Volt PFA catheter contributing to 14% growth in the US and the TactiFlex Duo catheter driving mid-teens growth in Europe.
Rhythm Management sales grew 13%, marking the third consecutive quarter of double-digit growth and continued outperformance of the market.
Heart Failure growth of 12% was driven by the market-leading portfolio of heart assist devices.
Continuous glucose monitoring sales were $2 billion and grew 7.5%, with growth reflecting an impact from a delay in the renewal process related to an international tender and a challenging comparison to last year.
Capital Allocation
The document does not contain specific information regarding dividends, share repurchases, capital expenditures, or debt payments for Q1 2026.
Industry Trends and Dynamics
CGM market estimated at 70 million to 80 million people globally who should be on CGMs, with the current market at approximately 10 million to 12 million people, indicating significant underpenetration.
Colonoscopy capacity remains fixed at approximately 6 million per year, creating a bottleneck as demand for CRC screening increases, with average wait times for colonoscopy between three to nine months depending on the state.
CRC screening guidelines were lowered from age 50 to 45 in 2021, adding many new patients, with potential for further lowering to age 40 based on emerging medical evidence.
Cologuard re-screens represent 25% of tests today with eligibility for re-screening every three years, with approximately 500,000 patients per year undergoing re-screens.
Competitive Landscape
Abbott's Electrophysiology business significantly outperformed the market with double-digit growth for three consecutive quarters.
In Structural Heart, competitive intensity has increased in the mitral space as one of the main competitors expanded their portfolio, requiring improved execution in the US.
Abbott's Core Lab business achieved high renewal rates of 90-plus percent and win rates of 55-plus percent in new business opportunities in the US.
Abbott's Cologuard has built a unique 1,000-person salesforce calling on Primary Care representatives with 200,000 healthcare professionals prescribing Cologuard every quarter.
Macroeconomic Environment
Oil and resin costs from the Middle East conflict are not yet impacting Abbott's costs, with no freight rate increases observed from suppliers, though the company is monitoring the situation closely.
Supply chain disruptions from the Middle East conflict resulted in minimal demand impact but required adjustments to ensure adequate product availability in the region through increased inventory in affiliate warehouses.
No drop-off in demand or reimbursement challenges were observed as a result of the Middle East conflict.
Growth Opportunities and Strategies
Exact Sciences acquisition adds approximately $3 billion of incremental sales in 2026 and accelerates Abbott's long-term sales growth rate, with the acquisition completing on March 23, 2026.
Pipeline achievements include earlier-than-planned approval and launch of two new PFA catheters, completion of patient enrollment in the CATALYST left atrial appendage device trial, and initiation of development activities for an implantable extravascular ICD product.
Positive results from a randomized controlled trial demonstrated that people with Type 2 diabetes on basal insulin therapy benefited from using Libre, including reductions in HbA1c and increased time spent in healthy glucose range.
Planned clinical trial initiations in the second half of 2026 include trials for a balloon-expandable TAVR valve, a leadless conduction system pacing device, a mitral replacement valve, a peripheral IVL device, and a wearable continuous lactate monitoring sensor for sepsis monitoring.
Nutrition business pricing actions implemented in Q4 2025 are showing early signs of intended effect with volume growth beginning to follow pricing actions, with early data indicating positive volume response.
Type 2 non-insulin CGM coverage is expected to add close to 10 million people with new coverage, accelerating commercial coverage and representing a significant reimbursement catalyst.
International CGM expansion opportunity exists with only four of the top 10 global markets having full basal coverage, leaving six large markets still in evaluation and budget processes.
Cologuard international expansion strategy leverages Abbott's established regulatory, KOL, healthcare system distribution, and relationships across multiple markets.
Dual analyte system expected approval in the second half of 2026 will open access to approximately 1 million patients previously with limited access on the pump side.
Continuous ketone monitoring capability will benefit approximately 5 million SGLT2 users not currently using the product.
Financial Guidance and Outlook
Full year 2026 sales growth outlook of 6.5% to 7.5% on a comparable basis, including the full year sales of Exact Sciences in both prior and current year.
New full year adjusted earnings per share guidance range midpoint of $5.48, reflecting $0.20 of dilution related to the Exact Sciences acquisition consistent with assumptions at the time of the announced transaction, compared to previous guidance midpoint of $5.68.
Second quarter adjusted earnings per share forecast of $1.25 to $1.31.
Foreign exchange expected to have a favorable impact of approximately 1% on full-year reported sales, with relatively neutral impact expected for the second quarter.
CGM expected to return to double-digit growth in the second quarter after Q1 growth of 7.5%.
Acceleration in growth expected in the second half of the year driven by executing growth strategy in Nutrition, accelerating growth in Electrophysiology and Core Lab Diagnostics, continuing strong performance in EPD and Medical Devices, and successfully integrating Exact Sciences.
Core Lab business full year growth expected in the mid-single-digit range, with second half growth higher than first half.
China Core Lab business modeled at a single-digit decline for the year, improving from 15% to 30% declines in each quarter of the prior year as VBP headwinds lap.
Structural Heart growth expected to be high single digit for the full year despite geographic differences persisting for a period.
Electrophysiology business expected to accelerate growth and grow faster than the mid to high-teens market growth rate by the exit of the year.
Pipeline and Innovation
Earlier-than-planned approval and launch of two new PFA catheters in the Electrophysiology business.
CATALYST left atrial appendage device trial completed patient enrollment, with trial readout expected in approximately one to two years.
Implantable extravascular ICD product development initiated to bring new technology to market.
Volt PFA catheter features conscious sedation capability and preliminary data suggests lesions created are more durable than competing products.
TactiFlex Duo catheter provides easy-to-use design with very fast lesion creation and seamless switch between RF to PFA.
Libre 5 development underway to continue sustaining competitive advantage through product innovation.
