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 pricing actions, 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, which 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.
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, reflecting lower sales volumes compared to prior year and the effect of strategic pricing actions implemented in Q4 2025.
EPD pharmaceutical business sales increased 9%, 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 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.
Core Lab business in China was flat in Q1, compared to 15-30% declines in each quarter of the prior year, with China modeled for single-digit decline for the full year.
US Core Lab team achieved high single-digit growth rates with 90-plus renewal rates and win rates of 55-plus on new business.
Capital Allocation
New guidance range midpoint of $5.48 for full year adjusted earnings per share, reflecting $0.20 of dilution related to the Exact Sciences acquisition consistent with assumptions at the time of the announced transaction.
Exact Sciences acquisition closed on March 23, 2026, adding a new high-growth business to the Abbott portfolio.
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 10 million to 12 million people.
Colorectal cancer screening market remains underpenetrated with 50 million Americans not up-to-date with CRC screening.
Colonoscopy capacity constraint with fixed capacity of approximately 6 million procedures per year and average wait times between three to nine months depending on state.
Screening guidelines lowered from age 50 to 45 in 2021, adding many new patients, with potential for further lowering to age 40.
Electrophysiology market expected to grow at mid to high-teens rate, with Abbott targeting faster growth than the market by year-end.
Competitive Landscape
Abbott's Cologuard maintains 95% sensitivity equivalent to colonoscopy, providing competitive advantage as at-home convenient alternative.
Structural Heart business facing increased competitive intensity in mitral space as a main competitor expanded their portfolio.
Abbott's Volt PFA catheter designed as upgrade to first-generation products, leveraging mapping systems and conscious sedation capabilities.
Preliminary data from European Heart Rhythm meeting showed Volt lesions are more durable than competitor products.
Abbott's Electrophysiology portfolio includes two new PFA catheters, new ICE catheter, new introducer, and second-generation LAA device, providing differentiated and complete portfolio.
Macroeconomic Environment
Middle East conflict impact on Abbott's business was minimal in Q1, primarily affecting product distribution logistics rather than demand or reimbursement.
Oil cost impact from Middle East conflict too early to determine, with no freight rate increases from suppliers observed yet.
Abbott maintains dedicated teams monitoring cost shocks and gross margin improvement to anticipate and mitigate macroeconomic impacts.
Weaker-than-expected respiratory season in Q1 compared to historical patterns, with management cautious about forecasting Q4 respiratory demand.
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 established regulatory, KOL, healthcare system distribution relationships across multiple markets.
Type 2 non-insulin CGM coverage expected soon, which will add close to 10 million people with new coverage and accelerate commercial coverage.
International CGM reimbursement expansion with only four of top 10 markets having full basal coverage, leaving six large markets in evaluation process.
Dual analyte CGM system expected approval in second half of 2026, opening access to approximately 1 million pump patients previously unavailable.
Continuous ketone monitoring for SGLT2 users with approximately 5 million users not currently using the product who will benefit from this innovation.
Nutrition pricing actions showing early positive volume response, with Ensure product demonstrating volume growth across retailers that passed pricing to consumers.
New product launches in Nutrition expected to drive growth improvement over the course of the year.
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 positive Type 2 diabetes trial results for Libre.
Planned clinical trial initiations in second half of 2026 for 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.
Second quarter adjusted earnings per share forecast of $1.25 to $1.31.
Foreign exchange expected to have favorable impact of approximately 1% on full-year reported sales, with relatively neutral impact expected for second quarter.
Diagnostics expected to accelerate growth in second half of the year compared to first half, driven by Core Lab Diagnostics and improving market conditions.
Continuous glucose monitoring 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 and competitive challenges.
Core Lab business full year growth expected in mid-single-digit range, with second half higher than first half.
Management remains confident in acceleration in growth in second half of the year with clear visibility to key drivers including Nutrition growth strategy execution, Electrophysiology and Core Lab Diagnostics acceleration, EPD and Medical Devices performance, and Exact Sciences integration.
