Earnings Call Insights: Abbott Laboratories (ABT) Q4 2025
Management View
- CEO Robert Ford highlighted that 2025 showcased “Abbott’s leadership in innovation, disciplined execution and strategic actions taken to position the company for sustainable long-term growth.” He reported regulatory approvals for multiple products including Volt and TactiFlex Duo PFA, a new Navitor TAVR indication, CMS national coverage for TriClip and CardioMEMS, and the completion of pivotal trial enrollment for a new LAA device.
- Ford announced the acquisition of Exact Sciences, allowing entry into the cancer diagnostics market and adding a high-growth vertical to Abbott’s portfolio.
- Ford addressed challenges in Nutrition, noting a sales decline due to “market share loss, partly due to the loss of a large weight contract last year,” and emphasized a shift toward volume-driven growth with new pricing and promotion initiatives and a focus on innovation, stating “we expect to launch at least 8 new products over the course of the next 12 months.”
- He described Medical Devices as a strong performer with 10.5% sales growth, citing Diabetes Care CGM sales surpassing $7.5 billion for the year and double-digit growth across Rhythm Management, Electrophysiology, Structural Heart, and Vascular segments.
- CFO Philip Boudreau stated, “Sales increased 3.8% when excluding COVID testing sales. Adjusted earnings per share of $1.50 reflects growth of 12% compared to the prior year.” He added, “Adjusted gross margin profile was 57.1% of sales, which despite the impact of tariffs, increased 20 basis points compared to the prior year.”
Outlook
- Full-year 2026 guidance issued for adjusted earnings per share of $5.55 to $5.80, reflecting 10% growth at the midpoint, and organic sales growth expected in the range of 6.5% to 7.5%.
- Boudreau forecasted Q1 adjusted EPS of $1.12 to $1.18 and a favorable currency impact of around 1% on full-year reported sales.
- Ford indicated that “performance in the Nutrition to remain challenged in the first half of the year with a return to growth in the second half,” and expects “accelerating growth in 2026” driven by innovation and strategic execution.
Financial Results
- Sales increased 3.8% excluding COVID testing.
- Adjusted operating margin reached 25.8% of sales, a 150 basis point increase from the prior year.
- Adjusted R&D was 6.2% of sales, adjusted SG&A was 25.1% of sales.
- Foreign exchange had a favorable 1.4% year-over-year impact on Q4 sales.
- The Nutrition business experienced a sales decline, while Medical Devices and EPD reported double-digit growth in key segments.
Q&A
- Larry Biegelsen, Wells Fargo: Asked about guidance being lower than prior consensus and the impact of Nutrition. Ford responded that “the 0.5 point change on the top line is, as you pointed out, really the change in the near-term outlook…of our Nutrition business,” and affirmed confidence in returning to growth by the second half of 2026.
- David Roman, Goldman Sachs: Inquired about the EP portfolio and risk considerations in the outlook. Ford described a “toolbox approach” in EP and stated, “I think we’re in a really good position, and I’m excited to see the second part of the strategy that we put together 3 years ago.” On guidance, he explained that “a very big portion of the company…is sustaining this high single-digit growth,” with acceleration in Diagnostics as headwinds fade.
- Robert Marcus, JPMorgan: Asked about CGM growth and margin expansion. Ford confirmed “the math will work out…in the kind of low teens” for CGM growth, and Boudreau added, “we continue to look at a 50 to 70 basis point improvement in operating margins every year.”
- Vijay Kumar, Evercore ISI: Queried on AVEIR penetration and capital allocation post-Exact Sciences. Ford estimated AVEIR at “about 10%” penetration in a $5 billion market and reaffirmed focus on integrating Exact Sciences.
- Danielle Antalffy, UBS: Sought clarification on Nutrition pricing strategy and profitability. Ford reported “early signs are encouraging” on pricing initiatives and stated profitability is “probably from a profile perspective, going to be in line with what it was in 2025.”
- Matthew Taylor, Jefferies: Asked about Diagnostics in China. Ford noted “we’ve gone through what I would consider the bulk of our VBP,” projecting mid-single-digit growth overall and 7%-8% excluding China.
- Travis Steed, BofA: Asked about MedTech macro environment and cadence. Ford stated, “Our volumes are really good in Q4 across all of our categories,” and growth is expected to accelerate in the second half.
- Joanne Wuensch, Citi: Addressed EPD and Structural Heart. Ford stated, “EPD delivered its fifth consecutive year of sales growth exceeding 7%,” and outlined continued investment in Structural Heart.
- Joshua Jennings, TD Cowen: Asked about capital allocation and Nutrition recovery. Ford said, “I don’t consider a need for inorganic in our Nutrition business to execute the strategy that I just described.”
Sentiment Analysis
- Analysts’ tone was neutral to slightly cautious, with repeated probing on Nutrition recovery, margin sustainability, and market headwinds, as well as strategy in EP and Diagnostics.
- Management maintained a confident tone in prepared remarks and Q&A, especially regarding innovation, pipeline execution, and the integration of Exact Sciences. Ford repeatedly emphasized confidence in the company’s ability to manage short-term Nutrition challenges and drive long-term growth, including statements like “I’ve got high expectations for this business this year.”
- Compared to the previous quarter, management showed slightly more defensiveness regarding Nutrition but sustained high confidence in operational execution and pipeline launches.
Quarter-over-Quarter Comparison
- The company shifted from reporting 4% sales growth in Nutrition in Q3 to a sales decline in Q4 and outlined a structural change to reignite volume growth, moving away from price-driven strategy.
- Q3 guidance language was confident in sustaining high single-digit sales and double-digit EPS growth; Q4 guidance reduced sales growth midpoint by 0.5% due to Nutrition headwinds but maintained 10% EPS growth.
- Analysts in both quarters focused on product pipeline, market share, and margin trajectory, but Q4 saw intensified questioning on Nutrition and capital allocation.
- Management’s confidence in MedTech, Diagnostics, and new launches remained strong quarter-over-quarter, with added emphasis on strategic acquisitions and operational discipline in Q4.
Risks and Concerns
- Management explicitly cited “heightened market challenges in China” and ongoing “manufacturing costs in nutrition” as key risks.
- Ford described “price increases in the current economic environment have become a factor in constraining volume growth” and stated, “the path is not sustainable in the long term.”
- Analysts raised concerns about the pace of Nutrition recovery, margin expansion, and the impact of VBP in China on Diagnostics.
- Mitigation strategies include new product launches, pricing and promotion shifts, increased innovation focus, and operational excellence across core segments.
Final Takeaway
Abbott Laboratories closed 2025 with robust performance in Medical Devices and EPD, while navigating Nutrition headwinds through a transition toward volume-driven growth and new product launches. The company forecasts 7% organic sales growth and 10% adjusted EPS growth in 2026, supported by strategic innovation, operational discipline, and the integration of Exact Sciences. Management remains confident in its ability to drive sustainable long-term growth, even as it addresses near-term challenges in Nutrition and adapts to evolving market conditions in China and other key markets.