Prepared remarks
Good morning, and thank you for standing by. Welcome to Abbott's Second Quarter 2026 Earnings Conference Call. During the question-and-answer session, you will be able to ask your question by pressing the star 1 keys on your touch-tone phone. This call is being recorded by Abbott. With the exception of any participants' questions asked during the question-and-answer session, the entire call, including the question-and-answer session, is material copyrighted by Abbott. It cannot be recorded or rebroadcast without Abbott's expressed written permission. I would now like to introduce Mr. Michael Comilla, Vice President, Investor Relations.
Good morning, and thank you for joining us. With me today are Robert Ford, Chairman and Chief Executive Officer, and Philip Boudreau, Executive Vice President, Finance, and Chief Financial Officer. Robert and Philip will provide opening remarks. Following their comments, we will take your questions. Before we get started, some statements made today may be forward-looking for purposes of the Private Securities Litigation Reform Act of 1995, including the expected financial results for 2026. Abbott cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated in the forward-looking statements. Economic, competitive, governmental, technological, and other factors that may affect Abbott's operations are discussed in Item 1A, Risk Factors, to our Annual Report on Form 10-K for the year ended 12/31/2025. Abbott undertakes no obligation to release publicly any revisions to forward-looking statements as a result of subsequent events or developments except as required by law. On today's conference call, as in the past, non-GAAP financial measures will be used to help investors understand Abbott's ongoing business performance. These non-GAAP financial measures are reconciled with comparable GAAP financial measures in our earnings news release and regulatory filings from today, which are available on our website at abbott.com. Note that Abbott has not provided the related GAAP financial measures on a forward-looking basis for the non-GAAP financial measures for which it is providing guidance because the company is unable to predict with reasonable certainty and without unreasonable effort the timing and impact of certain items, which could significantly impact Abbott's results in accordance with GAAP. Unless otherwise noted, our commentary on sales growth refers to comparable sales growth. Our definition of comparable sales growth can be found on Page 2 of our press release issued earlier today. A reconciliation table containing the data needed to calculate comparable sales growth can be found on pages 16 and 17. With that, I will now turn the call over to Robert Ford.
Okay. Mike, good morning, everyone, and thank you for joining us. Today, we issued second quarter results that included sales growth of 4.8%, which represents an acceleration compared to the previous two quarters, and adjusted earnings per share of $1.31, which exceeded the midpoint of our guidance range and the consensus estimate. Considering our second quarter results and updated outlook for the remainder of the year, we are reaffirming our full-year guidance for comparable sales growth of 6.5% to 7.5% and raising our EPS guidance range to $5.45 to $5.60. Before summarizing our second quarter results, I want to highlight a few recent pipeline achievements, including completing patient enrollment in our Tectonic coronary IVL pivotal trial; completing our FDA submission for approval of our new Amulet 360 left atrial appendage device; obtaining CE Mark for Libre Duo, the world's first dual glucose-ketone monitoring sensor designed to detect rising ketone levels and help prevent diabetic ketoacidosis. We anticipate launching these three new products, along with our Tactiflex Duo PFA catheter, in the U.S. at a steady cadence over the next 12 months. We also remain on track to begin patient enrollment in the fourth quarter for several important clinical trials that will support a steady cadence of future product launches. These include a balloon-expandable TAVR valve; a leadless conduction system pacing device leveraging our Avera pacemaker; a mitral replacement valve developed following the acquisition of Cephea Valve Technologies; a peripheral IVL device developed following the acquisition of CSI; and a wearable continuous lactate monitoring sensor designed to reduce the risk of sepsis following discharge from the hospital. I will now review our second quarter results in more detail before I turn the call over to Philip, and I will start with diagnostics. Diagnostic test results inform approximately 70% of all health care decisions, making testing volumes a reliable barometer of overall health care activity and demand. Our test volume data, which is sourced directly from our diagnostic instruments located across the United States and around the world, continues to reflect strong and stable demand for testing. We view this as a positive indication of durable underlying demand for healthcare, not just in the U.S., but globally. This durable demand was evident in our core laboratory results this quarter where the U.S. business grew 7.5%, and we continue our track record of strong performance across Latin America. In rapid and molecular diagnostics, sales declined 8% driven by the anticipated decrease in respiratory testing as a result of a weaker-than-normal season that concluded during the second quarter. In cancer diagnostics, sales growth of 13% was driven by mid-teens growth of Cologuard, which is benefiting from a growing base of both new and repeat Cologuard users as well as contributions to growth from our precision oncology and international business. We continue to expect cancer diagnostics growth in the second half of the year to be higher than the first half, supported by increasing volumes from care-gap programs, recently launched tests, and continued international adoption. In May, the American Cancer Society updated its colorectal cancer screening guidelines reaffirming Cologuard and Cologuard Plus as preferred screening options. This designation reflects Cologuard's market-leading accuracy and superior ability to detect cancer at earlier stages compared to other available tests. Moving to nutrition, where sales finished slightly ahead of our expectations for the second consecutive quarter, sales increased sequentially by $125 million, driven by improving performance in both pediatric and adult nutrition. In pediatric nutrition, our international business was the first of our nutrition businesses to transition back to delivering positive growth, delivering growth of 6.5% in the quarter. In U.S. pediatric, we exited the quarter with the full benefit of recent WIC contract wins reflected in our run rate, and as a result, Abbott is now the market leader in both WIC and non-WIC segments. In adult nutrition, we continue to see positive volume trends in response to the price actions implemented late last year. In the U.S., retail consumption of Ensure increased double digits compared to consumption levels exiting last year and achieved the highest year-over-year consumption growth in the past year and a half. We are also making good progress in our international adult nutrition business where sales continue to grow sequentially and are now approaching levels similar to this time last year. We are also benefiting from sales contributions from new innovation, including new versions of Ensure that feature higher protein, lower sugar, and refreshed labeling and packaging. So overall, I remain encouraged by the progress we are making and confident in our outlook for the second half of the year. Turning to EPD, where we continue to deliver consistently strong performance, sales grew 9% in the quarter reflecting broad-based growth across our largest markets, including India, Latin America, and Southeast Asia. This performance reflects disciplined execution by our teams and the growing demand for healthcare in emerging markets. This demand is a result of evolving market dynamics, including expanding access to health care, aging populations, and a rising need to treat both acute and chronic conditions. These structural tailwinds, combined with our broad portfolio, expanding pipeline of biosimilars, and strong brand equity, position EPD to sustainably deliver high single-digit sales growth. And I will wrap up with medical devices where sales grew 8.5%. Growth of 8.5% in our cardiovascular device portfolio was led by low growth in electrophysiology and high single-digit growth in rhythm management and heart failure. In electrophysiology, the second quarter marked the beginning of an acceleration in our growth trajectory. We launched our next-generation Bolt PFA catheter, commonly referred to as Bolt 2.0, in the U.S. in May, and we expect to transition from a limited market to a full market release in the third quarter. Internationally, the expanding rollout of Bolt and Tactiflex Duo is gaining strong traction, driving growth of more than 20% in Europe. We remain confident in our outlook for the second half of the year, including our expectations to begin outperforming the market and recapturing share. In Rhythm Management, sales grew 9.5% as we continue to expand the use of Avera across both the single- and dual-chamber segments of the pacemaker market and drive broader adoption of this innovative technology. In heart failure, growth of 9% was led by double-digit growth in the U.S., driven by our market-leading portfolio of heart assist devices that address both chronic and acute patient needs. In diabetes care, continuous glucose monitoring sales exceeded $2 billion, reflecting growth of 9.5% in the quarter. In May, we secured CE Mark for Libre Duo, the world's first dual glucose-ketone wearable sensor. We will begin the international rollout of Libre Duo in the fall and we look forward to bringing this innovative new technology to the United States market after we obtain FDA approval. So, in summary, we remain highly focused on disciplined execution in each quarter. Our second quarter results represent an important building block as we move into the second half of the year. We have momentum building across the portfolio and have a clear line of sight to the key drivers of sales growth acceleration that are forecasted in the second half. Our continued focus on gross margin expansion gives us confidence in raising our full-year EPS guidance. And we have several new products that we anticipate launching at a steady cadence over the next 12 months. I will turn the call over to Philip.
Thanks, Robert. As Mike mentioned earlier, please note that all references to sales growth rates, unless otherwise noted, are on a comparable basis. Turning to our second quarter results, sales increased 4.8% on a comparable basis and adjusted earnings per share of $1.31 exceeded the midpoint of our guidance range and the consensus estimate. Foreign exchange had a favorable year-over-year impact of 0.8% on second quarter sales, which was a slight improvement to our expectations at the time of our earnings call in April. Regarding other aspects of the P&L, the adjusted gross margin profile was 58.0% of sales, representing an increase of 100 basis points compared to the prior year. The improvement was broad-based, reflecting favorable business mix within the legacy Abbott portfolio and from the addition of Exact Sciences as well as the continued operational improvements and discipline of our margin expansion initiatives. Adjusted R&D was 6.9% of sales, and adjusted SG&A was 28.6% of sales. Based on current rates, we expect exchange to have a positive impact of 1% on full-year sales, which includes our expectation for exchange to have a negative impact of approximately 1% on third quarter sales. For the third quarter, we forecast adjusted earnings per share of $1.38 to $1.46. With that, we will now open the call for questions.
Questions and answers
Thank you. At this time, we will conduct a question-and-answer session. As a reminder, to ask a question, you will then hear an automated message advising you that your hand is raised. To withdraw your question, please press star 1 again. For optimal sound quality, we kindly ask that you please use your handset instead of your speakerphone when asking your question. And again, that is star 1 to ask a question. And our first question comes from Robert Marcus from JPMorgan. Your line is open.
Great. Good morning. Thank you very much for taking the questions. Robert, if I may, two. One, a market question; one an Abbott question. If I start with the market question, I think a theme that a lot of investors are focused on given some of the negative preannouncements out of the hospital sector is the potential for decelerating procedure volumes, particularly in the U.S. We heard from J&J yesterday that they are not seeing any sign of that. We heard from you this morning, particularly on the diagnostic volumes where you have a great view into forward-looking volumes, it sounds like you are not seeing anything. So I would love to hear your view on the health and the forecast of procedure volumes in the U.S. and what you are seeing and expecting.
Sure. I mean, that seems to be a topic of concern for investors. I think it is less of a concern for the companies that are in the markets where we are operating. I think there are a couple reasons for that. I think some of the concern for the decline in volumes is tied to challenges with ACA enrollment or disenrollment in Medicaid. I think that is a flawed assumption as it relates to the med tech and diagnostic space. When the ACA was implemented, pharma companies predominantly benefited from new patients coming into the market. We did not see that in med tech or in diagnostics; we did not see a spike in demand with the expansion of Medicaid. So it is logical to assume that if we did not see the benefit, I do not think we will see downside if that is what is happening now. One reason is that it is not Medicaid that is a driver of med-tech surgical procedures in the United States; it is actually Medicare. Medicare is by far the largest U.S. payer as it relates to devices. For us, it is over two-thirds of our U.S. cardio business. I also want to note that not all health care products are the same. Demand for high-acuity, life-saving products is very inelastic. In the U.S., we treat people with serious acute medical conditions, and the system does not deny care only to those people with insurance. That is why we did not see an impact with the ACA expansion in these businesses—those patients were already being treated. Our portfolio is tied to major chronic conditions like diabetes, cardiovascular disease, and cancer, which are less likely to be foregone because of insurance status. Our data is not showing a decline. I'm not just referring to our weekly sales; looking ahead, one of the benefits of our diversified model is that it provides a holistic view of the entire health care system globally. Our instruments are located across the country and around the world. Testing volumes in the U.S. have held up very well, including in states that have seen the highest levels of ACA disenrollment. From that perspective, our U.S. Core Lab business has accelerated growth in the last two quarters; it was about 7.5% this quarter. If you unpack that, our business selling instruments and reagents specifically for hospital testing was up 13% this quarter. I think the diagnostic system is a forward-looking indicator, and we are not seeing a decline. Our U.S. cardio business is performing better than it has ever been, and we are seeing similar strong, stable demand internationally in both developed and emerging markets. I feel very good about overall health care markets and especially our markets. One dynamic to keep in mind is demographics: every day in the United States, roughly 10,000 people turn 65, and aging is a driving factor of healthcare. So we do not see this as a concern right now.
Well, that is great to hear. Robert, just a quick follow-up, one Abbott specific. It was good to see a small beat on organic sales in the second quarter. The forecast includes an acceleration in the third and fourth quarter. I would love to hear how you are feeling about the confidence level in that acceleration in the second half and if you do not mind just highlighting some of the key growth drivers that get you there? Thanks a lot.
Sure. I am feeling very confident, and that confidence is driven by a lot of hard work the team is doing. Q2 results showed we have momentum building—our growth rate stepped up to mid-single digits from low single digits in the prior two quarters. Sales growth accelerated each month during the quarter. For the second half, a lot of businesses are doing strong growth rates and we forecast those to continue. Eighty percent of the lift in the second half, the trajectory shift, is coming from four areas: Nutrition, Electrophysiology, Core Lab, and Cancer Diagnostics. Each of these businesses is entering the second half with momentum and a clear line of sight to drivers of growth. Nutrition is tracking slightly ahead of expectations with pricing, new product launches, and commercial execution all working well. In EP, we have strong launch activity and good feedback on new products. In Core Lab, many businesses have performed well globally; while we still expect a decline in China from the VBP pressure, it will be much lower, mid-single digits, allowing other businesses to overpower that impact. Cancer diagnostics has a very good trajectory, especially with new Cologuard users exceeding expectations and care-gap programs ramping. Overall, those four areas represent the significant shift, and most are entering Q3 with momentum—some slightly ahead of our expectations—so we feel good about the second-half acceleration.
Thank you. Our next question comes from Larry Biegelsen from Wells Fargo. Your line is open.
Good morning. Thanks for taking the question. Robert, I would love to double click on Libre. Could you talk about Libre trends in the U.S. and internationally? I know you reported worldwide growth of 9.5%. What is the outlook for the CGM business for the remainder of this year? And what is your latest thinking on U.S. timing for the dual glucose-ketone sensor and type 2 non-insulin coverage? Can these accelerate your CGM growth or just maintain the current rate? Thank you.
Sure, Larry. I understand the perspective on 9.5% on a $2 billion quarterly business—it's a large base. Let me unpack this market. I remain very bullish about CGM. There are 75 to 80 million people around the world who could realistically be on a CGM and only about 15 million are today, so there is plenty of room for growth. The number-one immediate driver is reimbursement expansion. We are in active discussions with a dozen or so countries that are looking to introduce or expand reimbursement because of robust clinical data showing CGM lowers A1C, reduces hospitalizations, and increases time-in-range. The difficulty is predicting the exact month or quarter when reimbursement expansions will happen. The U.S. type 2 opportunity is huge—potentially unlocking around 10 million Medicare beneficiaries and accelerating commercial coverage—and it could happen in the fall, but I cannot precisely forecast timing. When reimbursement expansions occur, growth typically accelerates dramatically. Until then, without a major reimbursement expansion, the market can plateau around 8% to 9% growth, which is still strong for a business of this size. We are planning and investing—already planning for a potential fifth manufacturing facility given capacity trajectories. We feel very good about the market, the clinical evidence, the ongoing reimbursement discussions, and our positioning. Regarding U.S. timing for DGK (dual glucose-ketone), discussions are in very advanced stages, but I will not forecast timing. As soon as we have approval, we will announce it and prepare the market. We also have other programs in development that will drive growth. Overall, the business is very strong; reimbursement expansion will be a major accelerator when it occurs.
Robert, thanks for the comprehensive answer. Just to set the record straight, I was not criticizing the 9.5%; I just wanted to be clear about that. Thank you.
You can criticize, Larry—that's fine. This is a good business and it's doing very well. It gets a lot of attention because of the competitive dynamics, but there is significant opportunity given the addressable population and reimbursement potential.
Thank you. Our next question will come from Vijay Kumar from Evercore ISI. Your line is open.
Hi, Robert. Good morning and thank you for taking my question. I wanted to dive a little bit on Exact Sciences. The business did slightly north of 13% in the first half; I think you are assuming a step up in the back half to maybe 16% plus. A lot of that may be driven by pricing and care-gap programs. How much visibility do you have on care-gap programs stepping up in the back half for Exact Sciences? Also, the FREEMONT (Free NOM) data on redo advanced adenoma detection showed results north of 18%, well above competition. When you think about the blood side of CRC screening, do you still expect Abbott to be the market leader on the blood side even though your entry might be slightly behind competitors? Thank you.
Sure. We grew 13% in the first half. Our deal model for 2026 called for mid-teens growth, and I feel confident we'll achieve that. The model called for the second half to be higher than the first half and the integration of Exact Sciences is going very well. We're not seeing disruption; I'm impressed with the team and their market knowledge. Care-gap programs ramp in the second half and are a contributing factor to the acceleration. Care-gap programs help health systems achieve HEDIS credit and Star ratings, and health systems focus on those metrics particularly in the second half of the year. We have visibility into many of those programs: Exact Sciences has an experienced market-access team and active discussions with health systems. Price is an element as you transition between Cologuard and Cologuard Plus, which provides some tailwind. We have several medium- and long-term growth drivers: new users coming to Cologuard exceeding expectations, a reliable rescreen funnel of repeat users, CancerGuard investment and next-generation MRD data coming, international expansion, and the ability to add a blood test to the portfolio. Blood tests are more convenient, but they typically have lower sensitivity for precancerous polyps compared to stool tests like Cologuard. Our strategy is to have both stool and blood offerings to bring more people into the screening funnel and then educate them on the benefits of Cologuard. I view this as a strong opportunity; the integration is going well and the team is executing.
Thank you. Our next question will come from Matt Taylor from Jefferies. Your line is open.
Hi. Good morning. Thanks for taking the question. I thought it would be worth spending a minute on EP given you have this series of launches. You seem to be gaining traction with Bolt already. Could you comment on market dynamics and your aspirations in the market? Maybe talk about how you think the AF market will continue to grow and how you are committing to growing above the market in the second half. How could that continue into next year and what are your share aspirations?
Sure. I won't give specific share targets, but we do expect to grow faster than the market and start to capture share. We saw early signs in Q2 with sales increasing month-to-month. The transition from limited market release to full market release of Bolt in the U.S. and continued rollout of Tactiflex Duo internationally will accelerate growth. Feedback from physicians has been strong—Bolt's integration with mapping systems and not having to step back to inferior mapping infrastructure is a key benefit. This has implications for ASC adoption given the open footprint and the ability to do cases under conscious sedation rather than general anesthesia. Bolt delivers durable lesions and better lesion visualization, which physicians appreciate. Tactiflex Duo builds on a familiar chassis known for ease of use and seamless transition between PFA and RF. We saw nice share capture trends in Europe—EP was up more than 20% in Europe this quarter. Our growth strategy is not limited to a single catheter; it's about the entire procedure: mapping systems, catheters, introducers, ICE catheters, and ancillary products. We continue to invest in mapping to maintain superiority as competitors launch mapping systems. I expect global EP growth to accelerate—it's in the teens now and should accelerate in the second half. Momentum should carry into next year, and new product introductions like the Amulet 360 LAA device will provide additional boosts to the portfolio.
Thank you. Our next question comes from Travis Steed from BofA Securities. Your line is open.
Hey, Robert. Thanks for taking the question. As we move into the second half of this year, investors will start looking at next year. How do you think about the Abbott portfolio for 2027 if this is a year that sets up for better growth? You have easier nutrition comps, expanding coverage in Libre, EP accelerating, Amulet 360 launching. How do you think about growth in 2027?
It's a little early to give exact guidance for 2027, but we generally target roughly 7% top-line growth as a sustainable target. Despite a larger base today, we believe a 7% target is achievable. Looking across segments, a rough view would be: nutrition in a 2% to 4% range, diagnostics with Exact Sciences and a subsiding VBP impact in China in a 7% to 8% range, EPD in a 7% to 9% range, and med tech in an 8% to 10% range. The low end of these ranges approximates 6.5% overall and the high end about 8%, so a 7% target remains appropriate. We're also thinking beyond 2027, planning for launches and clinical programs that deliver contributions in 2029–2030, and building the pipeline to sustain growth into 2028 and 2029.
Our next question comes from Josh Jennings from TD Cowen. Your line is open.
Hi. Good morning. Wanted to ask on the structural heart unit. Your team has been clear it may take some time for the U.S. franchise to regain its foundation. Any help thinking through strategic initiatives—commercial infrastructure, pricing, innovation such as balloon-expandable TAVR and the mitral replacement valve—in development. When can the Structural Heart franchise start to see improved trends? Could that be 2027?
I expect structural heart to be in the mid- to high-single-digit growth range by the end of the year, returning toward prior performance. Where we've fallen short is not on price or product, but how we approach competing in the mitral space in the U.S. Competitive intensity increased, and it's taken a few quarters to respond. We have made personnel changes and are adjusting our market approach. We have one of the broadest portfolios in Structural Heart, and the U.S. team is working on better positioning of the full portfolio. We're seeing good growth in tricuspid and TAVR in the U.S., but the mitral side needs focused commercial execution. The international team has grown double digits in the first half—TAVR up roughly 30%—and there are strategies the U.S. organization can learn from. Longer term, the pipeline is strong: product launches, trials, label expansions, and the Cephea mitral replacement valve could help realize promise for the mitral market. In the short term, improved commercial execution should drive recovery through the balance of the year.
And our next question will come from Joanne Wuensch from Citi. Your line is open.
Good morning, and thank you so much for taking the question. The broad guidance commentary on nutrition for 2% to 4% is a nice acceleration off the last couple of quarters. Sounds like you are getting good momentum out of the WIC contracts. Is there an update on launching some new products as well as market positioning?
Absolutely. We remain on track. There are many proof points to be confident about both the second-half acceleration and the 2% to 4% range for this business. We had $125 million of sequential growth in the quarter, and monthly trends improved each month. On pediatric, international pediatric is back to positive growth and sales were the highest in the last two years. WIC contract gains are fully baked into our run rate and we are market leader in those segments. On adult nutrition, volumes are responding positively to the pricing actions taken late last year; U.S. retail consumption of Ensure is up double digits versus our exit in 2025 and is one of the highest year-over-year consumption growth levels in the past year and a half. We've worked through inventory and pricing, and both adult and pediatric are moving back to positive territory. Q3 should be the cleanest quarter; Q4 will have a tougher comp. New product launches are performing well, with a focus on higher protein and lower sugar given GLP-1 users' preferences. We have a collagen protein shake coming, an adult product with protein, HMB, and creatine, and a new infant formula using whole milk coming in the second half. The teams are executing and if this momentum continues, we may reassess guidance in the future, but for now we remain on the planned trajectory.
Crystal, we will take one more question, please. Thank you. Our last question will come from Robby Thibault from BTIG. Your line is open.
Hi. Good morning. Thanks for taking my question. I wanted to circle back on Amulet and the left atrial appendage closure market. You have an exciting product catalyst ahead with Amulet 360. What is Abbott seeing in the market today? Your competitor has mentioned some challenges. I want to understand appetite for LAA closure today and the opportunity for Amulet 360.
Sure, Robby. This remains a very attractive market—approximately a $2 billion market where the incumbent has a large share. Our focus is on market-share capture. Feedback on Amulet 360 has been excellent: the product shows superior sealing performance and provides a more seamless implant experience for physicians. LAA closure is increasingly an EP-driven procedure, with growth coming from concomitant procedures. We repositioned the portfolio into our EP business because we believe the winning company will have strong offerings across PFA catheters, mapping systems, and LAA devices. We see opportunity to relaunch the product, leverage lessons learned, and gain share. There are also market development opportunities on the interventional cardiology side. I expect Amulet 360 to be a meaningful growth driver for us in 2027 and beyond. So with that, I will close since we are up on time. We have made good progress addressing the short-term and temporary challenges we highlighted in January. We are entering the second half with momentum across several key growth drivers. We know what they are and are focused on execution each week and month to hit our targets. Our gross-margin expansion initiatives—mix and cost mitigation—are having an impact and have allowed us to raise full-year EPS guidance. Our cash generation and cash-flow management are likely to put us ahead of our January forecast for the year, allowing greater flexibility for capital return. I'm extremely excited about the pipeline we have built and the products we expect to launch over the next 24 months. It gives us confidence that the momentum we're building is sustainable into 2027 and 2028. Thank you for joining us today and for your questions.
This now concludes Abbott's conference call. A webcast replay of this call will be available after 11:00 a.m. Central Time today on our website abbott.com. Thank you for joining us today. This concludes today's conference call. You may now disconnect. Everyone, have a wonderful day.