Abbott Cuts 2026 Profit Forecast as Exact Sciences Acquisition Pressures Earnings

Abbott Laboratories trimmed its full-year 2026 earnings guidance on Wednesday, citing a $0.20 per share dilution impact from its $21–23 billion acquisition of Exact Sciences. Despite beating first-quarter expectations, the guidance cut sent Abbott shares down 4% as markets weighed the acquisition's near-term earnings pressure against longer-term growth prospects.

The Details

Abbott cut its full-year 2026 adjusted diluted earnings per share guidance to $5.38–$5.58, down from its prior forecast of $5.55–$5.80. The reduction reflects the integration costs and near-term dilution from the Exact Sciences deal, which Abbott closed on March 23, 2026, at $105 per share in cash.

In the first quarter itself, Abbott reported adjusted diluted EPS of $1.15, beating analyst consensus of $1.14 per share. Total revenue came to $11.16 billion, ahead of the $11.00 billion estimate, with reported sales growing 7.8% year-over-year on a reported basis and 3.7% on a comparable basis.

The Medical Devices segment drove Q1 strength, posting 13.2% year-over-year growth to $5.54 billion—above the $5.29 billion estimate. Heart device sales accelerated, with Rhythm Management jumping 17%, Electrophysiology rising 16.7%, and Heart Failure devices up 14.6%. Continuous glucose monitor sales in the Diabetes Care business grew 14.2% on a reported basis to $2.08 billion.

Weakness emerged in Nutrition, which declined 6.0% year-over-year to $2.017 billion on a reported basis (7.7% decline on a comparable basis). Pediatric nutrition fell 8.5% and adult nutrition fell 3.6%, reflecting lower volumes and strategic pricing actions. Diagnostics segment sales grew 6.1% to $2.180 billion, with the newly acquired Cancer Diagnostics business contributing $96 million in the roughly one week since the acquisition closed.

For Q2 2026, Abbott projects adjusted diluted EPS of $1.25 to $1.31, below analyst estimates of $1.37 per share. Citi analysts flagged the weakness in nutrition and softer-than-expected diabetes device growth, noting that continued nutrition headwinds could pressure shares in the near term.

Context

The Exact Sciences acquisition represents one of Abbott's largest-ever deals and marks the company's major push into the fast-growing cancer diagnostics market. Exact Sciences brings marquee assets including Cologuard, a widely used colorectal cancer screening test, and Oncotype DX, an early-stage breast cancer diagnostic. Cologuard contributed substantially to the newly acquired Cancer Diagnostics segment.

The deal also helps Abbott offset declining revenue from COVID-19 testing kits, which had been a significant revenue driver during the pandemic. Abbott has a long track record of acquiring and integrating diagnostic businesses, though this acquisition's size and integration costs are creating near-term earnings pressure despite the company's core operational beat in Q1.

Abbott maintains its long-standing dividend payout streak, having increased dividends for 54 consecutive years. The board declared a quarterly dividend of $0.63 per share in February 2026.

What's Next

The guidance cut suggests the company will absorb Exact Sciences integration costs throughout 2026. The Cancer Diagnostics line item, which contributed $96 million in one week post-close, may accelerate and eventually offset dilution as Abbott scales the business.

The market's reaction to the guidance cut will likely hinge on whether investors view the Exact Sciences acquisition as a strategic anchor holding back near-term results or a high-growth asset that will drive medium-term performance. Abbott's next quarterly earnings report will provide the first full quarter of Exact Sciences results post-integration.