Abbott Laboratories (ABT) Stock Falls 8% After Missing Q4 Revenue Target

TLDR

• Abbott Laboratories stock dropped 8% Thursday after reporting Q4 revenue of $11.5 billion, missing the $11.8 billion consensus
• Nutrition sales collapsed 8.9% as higher prices reduced consumer demand while commodity costs remained elevated
• Medical devices surged 12% and pharmaceuticals grew 9%, but diagnostics fell 2.5% on lower COVID testing
• Company forecasts 2026 adjusted earnings of $5.55 to $5.80 per share with 6.5% to 7.5% organic sales growth
• The $21 billion Exact Sciences deal remains scheduled to close in the second quarter of 2026

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Abbott Laboratories reported mixed fourth-quarter earnings Thursday, sparking an 8% decline in shares. The healthcare company delivered adjusted earnings of $1.50 per share, matching what analysts expected.

But the top line came up short. Abbott generated $11.5 billion in quarterly revenue, missing the Street’s $11.8 billion forecast. Sales grew 3% organically versus the year-ago period.

The nutrition division took another beating. This segment saw sales crater 8.9% during the quarter. Abbott’s nutrition portfolio features brands like Similac infant formula and Ensure supplement drinks.

Abbott Laboratories, ABT

This weakness has become a recurring theme. The nutrition business has dragged on results for multiple consecutive quarters now.

CEO Robert Ford addressed the ongoing struggles candidly. Manufacturing costs have climbed steadily over the past several years, he explained. Pandemic-era commodity price increases still sit in the company’s cost base today.

Abbott responded by implementing price increases. Those hikes are now creating a different problem. Ford admitted the higher prices are constraining volume growth in today’s economy. Consumers are pulling back on purchases.

Strong Device Performance Can’t Offset Nutrition Drag

Other divisions delivered better results. The medical devices business posted impressive 12% sales growth. Established pharmaceuticals increased 9% year-over-year.

Diagnostics sales declined 2.5% in the quarter. Abbott anticipated this drop due to falling COVID testing volumes compared to last year.

Shares opened at $120.82 Thursday and kept falling throughout the session. The broader S&P 500 index rose 0.6% the same day. Competitor Johnson & Johnson traded up 0.9% following its Wednesday earnings report.

Management Issues 2026 Forecast

Abbott provided forward guidance alongside the quarterly results. The company expects 2026 adjusted earnings between $5.55 and $5.80 per share. Analysts had been modeling $5.68 at the midpoint.

Abbott continues working toward its largest acquisition in nearly a decade. The company agreed to buy Exact Sciences for roughly $21 billion last year. Exact makes Cologuard, a home-based colorectal cancer screening product.

Abbott confirmed Thursday the transaction should finalize during the second quarter of 2026.

The earnings day selloff follows a familiar pattern. Last July, Abbott shares plunged 8.5% even though second-quarter earnings matched estimates. Investors reacted poorly to softer guidance that time around.

Abbott announced a dividend increase as part of Thursday’s release. The quarterly payment rises to $0.63 per share from $0.59. That translates to an annualized dividend of $2.52 and a 2.1% yield. Shareholders on record as of January 15th receive the payment February 13th.

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