Abbott to Spin Off Nutrition, Trims 2026 Sales Outlook

Abbott Laboratories (ABT) reported third-quarter adjusted earnings of $1.42 a share, in line with estimates, on revenue of $13.01 billion, up 14.5% from a year earlier. It also said it will separate its Nutrition business into an independent, publicly traded company by the end of 2027, and cut its 2026 comparable sales growth outlook to about 6% from 6.5%–7.5%. Shares fell $3.83 to $98.62 in the summary supplied for this article, a drop of about 3.7% from a prior close of $102.45, by our calculation. Figures below come from Abbott's earnings release unless noted.

Q3 results versus expectations

The gap between GAAP and adjusted EPS comes from $1.557 billion of after-tax specified items, or $0.89 a share, which included about $670 million of legal settlements (the Gill case and NEC claims). Revenue topped the $12.99 billion consensus by about $20 million, per Investing.com, so the quarter was essentially in line. Comparable growth counts Exact Sciences' prior-year sales, which Abbott acquired on March 23, 2026, so it is the cleaner measure of underlying growth.

Guidance: sales cut, EPS midpoint unchanged

The new sales outlook is about one point below the old midpoint of 7.0%, by our calculation. Abbott narrowed its full-year EPS range around an unchanged midpoint of $5.525, and its Q4 EPS guide of $1.62 to $1.67 was in line with expectations per the summary supplied. The prior EPS range comes from MassDevice's report, and the release itself does not state it. Management expects fourth-quarter sales growth of just over 8%, with about a 1% currency headwind, according to an Investing.com call transcript.

Why the sales outlook came down

Management pointed to two businesses on the call. In electrophysiology, slower left atrial appendage closure orders offset strong demand for newer ablation products; the company now expects Q4 electrophysiology growth near 20%, about five points below its earlier view of roughly 25%. In Diabetes Care, growth is now expected in the low to mid single digits instead of the earlier high single digits, because type 2 penetration has been slow without broader Medicare coverage and international pricing pressure is rising. CEO Robert Ford described these as adjustments rather than a permanent change in the growth rate.

Segment results

Medical Devices. Electrophysiology sales were $873 million, up 15.5% on a comparable basis (U.S. up 18.1%). Diabetes Care sales were $2.185 billion, up 6.7% comparable, with continuous glucose monitors up 7.7%. The FDA approved Libre Duo, a dual glucose-ketone sensor, in August. Diagnostics. Core Laboratory grew 5.4% comparable, and Cancer Diagnostics, which now includes Exact Sciences, grew 13.8% to $968 million, led by Cologuard. Established Pharmaceuticals. Key emerging markets grew 10.9%, with double-digit gains in India. Nutrition. Pediatric Nutrition grew nearly 9% to about $1.06 billion; the summary supplied adds that U.S. pediatric grew 11% on recent WIC contract wins, which we could not confirm.

The Nutrition separation

Abbott plans a tax-free distribution of its Nutrition business, including Similac, PediaSure, Ensure, Glucerna and Pedialyte, to shareholders, with completion expected by the end of 2027 and subject to approvals. The standalone company would have about $8.5 billion of annual sales, about 16,000 employees and 14 manufacturing sites, and Daniel Salvadori would be its CEO. It will raise debt, with part of the proceeds going to Abbott, and the combined dividends of the two companies are expected to equal Abbott's current dividend. One transcript summary's takeaways say end of 2026, which conflicts with the 2027 date in the call itself and in other reports.

Excluding Nutrition, management expects Abbott's sales growth to rise 50 to 100 basis points, gross margin to rise more than 200 basis points and operating margin to rise about 100 basis points. Nutrition was about 17% of Q3 sales, by our calculation. Ford said Abbott has no interest in selling the business, and separation costs will be excluded from adjusted earnings. Ford said the separation "will benefit both companies, setting each one up for maximum success in its respective market," according to MassDevice.

What management said about 2027

Management expects total company growth to accelerate in 2027 but is taking a conservative early view, with early 2027 sales expected to look roughly like 2026. Drivers include the U.S. launch of Libre Duo in December and a U.S. payer formulary change effective January 1, 2027. Detailed 2027 guidance will come in January. Abbott also declared its 411th consecutive quarterly dividend of $0.63 a share.

Sources: Abbott third-quarter 2026 earnings release (SEC Form 8-K, Exhibit 99.1), plus Investing.com and MassDevice reports for consensus figures, the prior guidance range, spin-off details and management comments on the call. The share price move, the nutrition U.S. pediatric growth figure and the in-line Q4 guidance characterization come from the summary supplied for this article. The release itself contains no separation details. This is informational, not a recommendation to buy or sell.