Abbott Ranked Among Healthcare Leaders in Medical Devices, But Nutrition Segment Fails to Yield

Abbott Laboratories released its fourth-quarter 2025 results, showing a mixed performance that reflects the company’s divergent business trajectories. While the pharmaceutical and medical device divisions demonstrated robust momentum, the nutrition segment continued to face significant headwinds, illustrating a story of uneven execution across the company’s diversified portfolio.

Earnings Outperform, But Revenues Fall Short

Abbott’s adjusted earnings per share of $1.50 for Q4 met analyst expectations, representing an 11.9% increase compared to the same period in 2024. However, the company’s revenue performance told a different story. Worldwide sales reached $11.46 billion, up 4.4% year-over-year, yet this figure missed the Zacks Consensus Estimate by 2.8%. On an organic basis—excluding currency impacts—sales grew 3%, while organic sales excluding COVID-related products increased 3.8%.

The full-year 2025 picture was similarly mixed. Adjusted EPS climbed to $5.15, up 10.3% year-over-year and meeting expectations. However, annual revenues of $44.33 billion, while up 5.7%, missed consensus by 0.6%. The revenue shortfall triggered a 5.4% decline in Abbott stock during pre-market trading.

Where Abbott Ranks Strongest: Medical Devices

Among Abbott’s four operating segments, Medical Devices emerged as the clear growth champion. This division posted sales of $5.68 billion in Q4, surging 12.3% year-over-year on a reported basis (10.4% organically), demonstrating performance that ranks among the strongest in the healthcare equipment space.

The division’s growth was broad-based, with multiple therapy areas delivering double-digit expansion. Electrophysiology led the charge with 12.5% organic growth, followed closely by Rhythm Management at 11.5%. The Heart Failure franchise accelerated 12.1% organically, while Structural Heart advanced 8.7%. Notably, the Diabetes Care division contributed significantly to overall momentum, with organic sales growth of 11.7% year-over-year. Continuous glucose monitors, a strategic focus area, generated $2.0 billion in sales alone, underscoring Abbott’s competitive positioning in chronic disease management.

The Vascular division, while posting more modest organic growth of 6.5%, continued steady expansion. Neuromodulation rounded out the segment with 5.6% organic growth, demonstrating the breadth of Abbott’s medical device portfolio.

The Innovation Factor: Volt PFA System

A significant milestone emerged during the quarter: Abbott received regulatory approval for its Volt PFA System, marking the company’s entry into the pulsed field ablation market in the United States. This product approval represents a strategic expansion of Abbott’s cardiac ablation capabilities and is expected to drive incremental growth in future periods.

Where Abbott Fails to Yield: Nutrition Contraction

In sharp contrast to Medical Devices, the Nutrition segment contracted 8.9% year-over-year on a reported basis (9.1% organically) to $1.94 billion. This decline reflected several headwinds: reduced sales volumes compared to the prior year and strategic price adjustments aimed at stimulating future volume growth. Additionally, competitive pressures in pediatric nutrition proved particularly acute, with that subsegment declining 10.1% organically, while adult nutrition dropped 8.2%.

Diagnostics: Uneven Recovery

The Diagnostics segment reported a 2.5% year-over-year decline on a reported basis (3.6% organically) to $2.46 billion. Performance within this division was mixed. Core Laboratory Diagnostics showed resilience with 3.6% organic growth, and Point of Care Diagnostics expanded 7.1%. However, Rapid Diagnostics faced significant challenges, falling 18.1%, likely reflecting normalization after pandemic-era demand. Molecular Diagnostics posted modest 1.1% organic growth.

Established Pharmaceuticals: Solid Execution

The Established Pharmaceuticals segment delivered steady performance, with sales rising 9% on a reported basis (7.1% organically) to $1.38 billion. Growth was particularly strong in emerging markets, with organic sales advancing 8.7% year-over-year. Double-digit expansion in India and several Latin American and Middle Eastern markets drove this performance, highlighting Abbott’s success in international markets.

Profitability Metrics Expand

On the profitability front, Abbott demonstrated operational discipline. Gross profit increased 8.4% year-over-year to $6.54 billion, with cost of products sold (excluding amortization) declining 0.4%. The gross margin expanded 208 basis points to 57%, reflecting improved operational leverage.

Adjusted operating profit rose 12.5% year-over-year to $2.67 billion, with the operating margin expanding 167 basis points to 23.3%. This margin expansion, despite modest revenue growth, underscores management’s cost control and operational efficiency efforts.

2026 Outlook and Investor Expectations

Looking ahead, Abbott projects full-year 2026 adjusted EPS between $5.55 and $5.80, slightly above the Zacks Consensus Estimate of $5.67. The company anticipates organic sales growth in the range of 6.5-7.5% for the full year, with analysts currently projecting revenues of approximately $48.01 billion.

For the first quarter of 2026, Abbott expects EPS between $1.12 and $1.18, compared to a consensus estimate of $1.19, suggesting slightly tempered near-term expectations.

Abbott’s Standing Among Healthcare Peers

Abbott currently maintains a Zacks Rank #2 (Buy), positioning the company as a favored healthcare holding among analysts. This ranking reflects confidence in the company’s Medical Devices segment momentum and stable profitability, though concerns about Nutrition segment headwinds remain.

Comparable healthcare companies ranked among the top performers include Fresenius Medical Care, which carries a Zacks Rank #2 with an impressive 10.7% earnings yield compared to the industry’s 0.5% average. National Vision holds a Zacks Rank #1 (Strong Buy), reflecting exceptional performance in recent quarters. Prestige Consumer Healthcare, also ranked #2, demonstrates earnings power with a 7.1% yield against the industry’s 2.8% benchmark.

The Bottom Line

Abbott’s Q4 results reveal a company at an inflection point. Its Medical Devices division ranks among the strongest growth drivers in healthcare, supported by innovation like the Volt PFA System and broad-based expansion across multiple therapy areas. However, the Nutrition segment’s continued contraction—failing to yield expected improvements—underscores execution challenges in an increasingly competitive marketplace. With 2026 guidance suggesting accelerated organic growth and margin expansion, investors will closely monitor whether management can address nutrition headwinds while capitalizing on medical device momentum.