Abbott Laboratories Earnings - Q1 2026 Analysis & Highlights
Abbott Laboratories reported Q1 2026 results marked by the completion of the Exact Sciences acquisition, mixed operational performance across segments, and confidence in second-half acceleration driven by diagnostics recovery, nutrition stabilization, and new product launches.
Key Financial Results
Adjusted earnings per share of $1.15, consistent with guidance despite earlier-than-planned financing costs from the Exact Sciences acquisition and a weaker-than-expected respiratory season.
Comparable sales growth of 3.7% on a comparable basis that includes full quarter sales of Exact Sciences in both prior and current year.
Adjusted gross margin of 56.3% of sales, adjusted R&D of 6.7% of sales, and adjusted SG&A of 29.3% of sales.
Foreign exchange had a favorable year-over-year impact of 4% on first quarter sales.
Adjusted earnings per share grew 6% compared to the prior year.
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 Volt PFA catheter contributing to 14% growth in the US and TactiFlex Duo catheter driving mid-teens growth in Europe.
Rhythm Management sales grew 13%, marking the third consecutive quarter of double-digit growth.
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 impact from a delay in an international tender renewal and 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 current market penetration at approximately 10 million to 12 million people.
Colonoscopy capacity remains fixed at approximately 6 million per year, creating a bottleneck as demand for CRC screening increases.
Average wait time for colonoscopy is between three to nine months depending on the state, indicating existing backlog.
Screening guidelines lowered the recommended age from 50 to 45 in 2021, adding many new patients to the addressable market.
Cologuard re-screens represent 25% of tests with eligibility for re-screening every three years, contributing approximately 500,000 patients per year for re-screens.
Competitive Landscape
Abbott's Structural Heart business faces increased competitive intensity in the mitral space as a main competitor expanded their portfolio.
Abbott's US commercial team in Structural Heart needs to improve execution and has undergone leadership changes to respond to competitive challenges.
Abbott's Core Lab business achieved high renewal rates of 90-plus percent and win rates of 55-plus percent in new business opportunities.
Abbott's Electrophysiology business delivered double-digit growth while competitors were launching PFA catheters, demonstrating market outperformance.
Volt PFA catheter offers conscious sedation capability and preliminary data suggests lesions created are more durable compared to competitors.
Macroeconomic Environment
Middle East conflict created supply chain challenges but did not result in significant demand or reimbursement impacts in Q1.
Oil cost impacts from the conflict are too early to assess, with no freight rate increases from suppliers observed yet.
Abbott implemented inventory management adjustments to ensure adequate product availability in affected regions despite efficient historical inventory practices.
Foreign exchange provided favorable 4% impact on Q1 sales, with expectations for approximately 1% favorable impact on full-year reported sales.
Second quarter expected to have relatively neutral foreign exchange impact on sales.
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.
Cologuard international expansion opportunity with Abbott's established regulatory, KOL, healthcare system distribution, and relationships across markets.
Type 2 non-insulin CGM coverage expected to add close to 10 million people with new coverage eligibility.
International CGM expansion with six of the top 10 markets still in the process of evaluating basal coverage.
Dual analyte CGM system expected approval in second half of 2026 to open access to approximately 1 million pump patients previously with limited access.
Continuous ketone monitoring for approximately 5 million SGLT2 users not currently using the product.
Nutrition pricing actions implemented in Q4 2025 with early data indicating volume growth beginning to follow pricing actions.
Pipeline achievements include earlier-than-planned approval and launch of two new PFA catheters, completion of patient enrollment in CATALYST left atrial appendage device trial, and initiation of development for implantable extravascular ICD product.
Clinical trials planned for second half of 2026 including balloon-expandable TAVR valve, leadless conduction system pacing device, mitral replacement valve, peripheral IVL device, and wearable continuous lactate monitoring sensor.
Financial Guidance and Outlook
Full year 2026 comparable sales growth guidance of 6.5% to 7.5%, including full year sales of Exact Sciences in both prior and current year.
Full year adjusted earnings per share guidance range midpoint of $5.48, reflecting $0.20 of dilution related to the Exact Sciences acquisition.
Second quarter adjusted earnings per share forecast of $1.25 to $1.31.
CGM expected to return to double-digit growth in second quarter.
Structural Heart growth expected to be high single digit for the full year despite geographic differences persisting for a period.
Core Lab business full year growth expected in mid-single-digit range, with second half higher than first half.
Electrophysiology business expected to accelerate growth and grow faster than the market by year-end.
EP market expected to be in the mid to high-teens growth range, with Abbott targeting to outperform the market.
Management remains confident in acceleration of growth in second half of the year with clear visibility to key drivers.
Pipeline and Innovation
Randomized controlled trial demonstrated Type 2 diabetes patients on basal insulin therapy benefited from using Libre, including reductions in HbA1c and increased time in healthy glucose range.
Volt PFA catheter launch in the US with conscious sedation capability and preliminary data on lesion durability.
TactiFlex Duo catheter launch in Europe with positive feedback on ease-of-use and fast lesion creation.
Next generation LAA device being added to Electrophysiology portfolio.
Leadless pacemaker technology (AVEIR) being incorporated into new conduction system pacing device.
Cephea Valve Technologies acquisition providing mitral replacement valve for development.
CSI acquisition providing peripheral IVL device for development.
