Abbott reported third-quarter 2026 results on Wednesday, October 21, before the open. Sales: $13.01 billion, up 14.5% - but on a comparable basis growth was 7.0%, and the gap between those two numbers is the whole story of this quarter.
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What was reported
| Q3 2026 | Q3 2025 | Change | |
|---|---|---|---|
| Net sales (millions of dollars) | 13,013 | 11,369 | +14.5% |
| Cost of products sold, excluding amortisation | 5,628 | 5,075 | +10.9% |
| Amortisation of intangible assets | 841 | 420 | 2x |
| Research and development | 920 | 766 | +20.1% |
| Selling, general and administrative | 4,266 | 3,051 | +39.8% |
| Total operating cost and expenses | 11,655 | 9,312 | +25.2% |
| Operating earnings | 1,358 | 2,057 | -34.0% |
| Interest expense, net | 297 | 44 | 6.8x |
| Earnings before taxes | 1,231 | 2,180 | -43.5% |
| Net earnings | 920 | 1,644 | -44.1% |
| Net earnings excluding specified items | 2,477 | 2,278 | +8.7% |
| Diluted earnings per share (dollars) | 0.53 | 0.94 | -43.6% |
| Earnings per share excluding specified items | 1.42 | 1.30 | +9.2% |
Source: Abbott's third-quarter 2026 press release, October 21, 2026, filed with the SEC on Form 8-K as Exhibit 99.1, per the full statement of earnings within it. "Excluding specified items" is a non-GAAP measure.
The two gaps to understand
The first gap - in the sales line. Reported sales rose 14.5%, but the comparable basis shows 7.0%. The difference comes from the acquisition of Exact Sciences, a cancer diagnostics company, completed on March 23, 2026 and presented as Abbott's Cancer Diagnostics business. The comparable basis, as the company defines it, includes Exact Sciences sales in both years, excludes foreign exchange, and excludes revenue from a multi-year agreement between the Structural Heart business and a competitor - the final payment for which was recognised in the first quarter of 2026.
The second gap - in the earnings line. GAAP earnings fell 43.6%, while earnings excluding specified items rose 9.2%. The specified items in the quarter: net after-tax charges of $1.557 billion, or $0.89 per share - for intangible amortisation, legal settlements, acquisitions and restructuring. In the year-ago quarter those items were $634 million, or $0.36 per share.
So both gaps come from the same source: the acquisition. It lifts reported sales, and at the same time creates amortisation and expenses that lower GAAP earnings.
And a third line from the same source, not in the headlines: net interest expense rose to $297 million, from just $44 million in the year-ago quarter - 6.8 times. The release does not explain the line, but the magnitude and the timing point to financing the acquisition. Interest expense, unlike amortisation, is cash going out.
The segments
| Segment | Sales | Reported change | Comparable change |
|---|---|---|---|
| Medical Devices | 5,826 | +6.9% | +7.8% |
| Diagnostics | 3,305 | +46.7% | +6.4% |
| Nutrition | 2,262 | +5.1% | +4.9% |
| Established Pharmaceuticals | 1,614 | +6.8% | +8.4% |
| Total company | 13,013 | +14.5% | +7.0% |
In millions of dollars.
Diagnostics is where the acquisition stands out: reported growth of 46.7%, but 6.4% comparable. In the United States alone the segment's reported sales rose 109.2% - more than doubling.
Medical Devices is the largest segment, $5,826 million, growing 7.8% on a comparable basis - the second-fastest rate after Established Pharmaceuticals (8.4%).
Guidance, and the pipeline
For the full year the company projects comparable sales growth of about 6.0%. It tightened the adjusted earnings per share range to $5.50 to $5.55 - reaffirming the midpoint of the prior range and cutting both ends.
On the product side, the quarter included several approvals worth noting:
- Libre Duo - FDA approval for the world's first biowearable sensor measuring both glucose and ketones. According to the company, detecting rising ketones helps prevent diabetic ketoacidosis.
- Amulet 360 - CE Mark for a next-generation left atrial appendage occluder, designed to reduce stroke risk in patients with atrial fibrillation.
- TactiFlex Duo - FDA approval for an ablation catheter delivering both pulsed field and radiofrequency energy.
- SimpleScreen CRC - an FDA-approved blood-based colorectal cancer screening test for adults 45 and older at average risk.
- Similac 360 - a ready-to-feed liquid infant formula made with whole milk.
The stock
The report was published before the open on Wednesday, so the trading reaction is that same day, October 21. The stock closed at $100.51, down 1.89% from the prior close of $102.45.
The intraday range is worth noting: the stock traded between $97.67 and $106.35 - meaning it rose as much as about 3.8% above the prior close before reversing. Volume: 22.9 million shares.
הזווית שלי
דעה אישית של אילן אברמוב - לא ייעוץ ולא המלצה
This report is an exercise in reading two numbers that describe the same company.
14.5% and 7.0%. The first is what came into the till, the second is what the business grew under its own power. Both are correct, and both are necessary: the reported figure says Abbott is now bigger, and the comparable figure says the part that was not bought is growing at a mid-single-digit rate. Whoever reads only the first thinks the company accelerated; whoever reads only the second ignores that the acquisition is a real asset.
What decides it for me is the Diagnostics segment: 46.7% reported against 6.4% comparable. That is the largest gap in the report, and it shows that almost all of the segment's reported growth comes from Exact Sciences and not from the existing base. In the United States, sales there more than doubled.
And on the earnings side, I would be careful from both directions. $0.89 per share of specified items - two and a half times the year-ago quarter - is a large number, and most of it is amortisation of intangibles created in the acquisition. Amortisation is a non-cash expense, so excluding it is reasonable; but it is also the price the company paid, spread over years. Writing "earnings rose 9.2%" without mentioning the $0.89 describes half the picture.
And the intraday range tells the argument: the stock rose almost 4% and then closed down 1.89%. The market read the same numbers both ways on the same day.
What I will follow: the comparable growth of the Diagnostics segment, which is the measure of whether Exact Sciences starts growing inside Abbott rather than merely joining it.
(To be clear: this is my personal opinion only. Nothing here is a recommendation to take any action, and there is no forecast here of the price of any security.)
Ilan Abramov, the author, or anyone on his behalf may hold some of the securities or funds mentioned in this article.
