10-Q · July 28, 2026
Abbott delivered strong Q2 revenue growth of 13.0% to $12.593 billion, led by the Exact Sciences acquisition in Diagnostics and continued Medical Devices momentum; diluted EPS was $1.31. However, gross margin slipped to…
Earnings analysis · 10-Q
ABT earnings analysis
Filed November 4, 2026 · Our reading of the company's report
The latest report
Abbott delivered strong reported revenue growth of 14.5% to $13.013 billion, led by the Exact Sciences acquisition, Diagnostics, and Medical Devices. However, third-quarter gross margin fell 1.4 percentage points to…
Read full summary
Abbott delivered strong reported revenue growth of 14.5% to $13.013 billion, led by the Exact Sciences acquisition, Diagnostics, and Medical Devices. However, third-quarter gross margin fell 1.4 percentage points to 50.3%, operating margin was approximately 10.4% versus 18.1% a year ago, and diluted EPS declined to $0.53 from $0.94. Cash and working capital declined while debt increased sharply to $29.451 billion following the acquisition, and material NEC and powdered-formula legal settlements added further earnings and cash-flow pressure. The Nutrition separation offers a potential strategic catalyst but introduces execution and regulatory uncertainty through the targeted 2027 completion.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.53
What stood out
-
Revenue growth accelerated
Third-quarter net sales rose to $13.013 billion from $11.369 billion, an increase of 14.5% reported and 14.8% excluding foreign exchange. Revenue was also up from $12.59 billion in the prior quarter.
-
Diagnostics boosted by Exact Sciences
Diagnostic Products sales increased 46.7% to $3.305 billion, including $968 million from Cancer Diagnostics. The Exact Sciences acquisition contributed approximately $2.0 billion of sales during the first nine months.
-
Medical Devices maintained solid growth
Medical Devices sales grew 6.9% to $5.826 billion, or 7.4% excluding foreign exchange. Nine-month CGM sales reached $6.2 billion versus $5.6 billion in the prior year, up 8.3% excluding foreign exchange.
-
Cash generation remained positive
Nine-month operating cash flow was $5.540 billion, while capital expenditures were $1.409 billion, implying approximately $4.131 billion of nine-month free cash flow. Remaining performance obligations totaled approximately $6.92 billion, including $6.2 billion in Diagnostics.
-
Strategic diagnostics expansion
Abbott completed the $20.6 billion Exact Sciences acquisition and established a position in cancer diagnostics, with acquired products including Cologuard, Oncotype DX, and Cancerguard.
-
Nutrition separation advances
The company announced plans to separate its Nutrition business into an independent publicly traded company and expects completion by the end of 2027, subject to regulatory approvals, a Form 10 registration statement, and final board approval.
What to watch
-
Margins and GAAP EPS declined
Profitability deteriorated materially: gross margin fell to 50.3% from 51.7% year over year, operating earnings declined to $1.358 billion from $2.057 billion, and diluted EPS fell to $0.53 from $0.94. Higher Exact Sciences amortization, legal settlements, costs, and foreign exchange pressured results.
-
Acquisition increased leverage
Leverage increased substantially following the Exact Sciences acquisition. Long-term debt was $29.451 billion at September 30, 2026 versus $9.896 billion at December 31, 2025, while cash declined to $4.052 billion from $8.522 billion; nine-month interest expense increased to $875 million from $373 million.
-
NEC and formula litigation exposure
Abbott recorded an approximately $670 million charge in the third quarter to resolve the Gill case and NEC claims involving approximately 2,000 additional infants, while the company stated it could not reasonably estimate the possible loss range for remaining NEC matters. Abbott also agreed to pay approximately $385 million, plus attorneys' fees and accrued interest, to resolve DOJ and related powdered-formula claims.
-
Nutrition demand and separation risk
Nutrition Products sales declined 1.3% for the first nine months, or 2.1% excluding foreign exchange, reflecting lower adult nutrition and U.S. pediatric volumes. The planned separation is subject to regulatory approvals and other conditions and is expected to complete by the end of 2027.
-
Working capital absorbed cash
Working capital decreased to $7.3 billion from $9.5 billion at December 31, 2025, while trade receivables increased to $9.032 billion from $7.929 billion and inventories increased to $7.337 billion from $6.488 billion. Management said higher inventory levels contributed to the approximately $700 million year-over-year decline in nine-month operating cash flow.
-
Diagnostics demand headwinds
Rapid and Molecular Diagnostics sales declined 5.4% excluding foreign exchange during the first nine months, primarily due to lower demand for respiratory virus tests, while Core Laboratory sales were pressured by challenging conditions in China.
Management's outlook
The 10-Q does not provide new numeric revenue or EPS guidance. The prior outlook disclosed with the October 21, 2026 earnings release was approximately 6.0% full-year comparable-sales growth, adjusted EPS of $5.50-$5.55, and fourth-quarter adjusted EPS of $1.62-$1.67.
Earlier filings 4
10-Q · April 29, 2026
Abbott Laboratories reported a solid performance in Q1 2026, with revenue increasing 7.8% year-over-year to $11.16 billion, surpassing consensus estimates. EPS also beat expectations at $1.15, up from $0.76 in Q1 2025,…
10-K · February 20, 2026
Abbott presents a diversified healthcare model across four reportable segments and announced a definitive agreement (Nov 19, 2025) to acquire Exact Sciences to enter the cancer diagnostics market. Full-year 2025 revenue…
10-Q · April 30, 2025
Abbott reported Q1 net sales of $10,358 million, up $394 million (+4.0%) versus the prior-year quarter (Q1 2024: $9,964 million), with operating earnings of $1,693 million and diluted EPS of $0.76 (Q1 2024: $0.70).…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.