Abbott Laboratories entered 2026 with a clear message to investors: growth remains intact, but the mix matters. Following its fourth-quarter earnings call, the healthcare giant reinforced expectations for resilient top-line expansion and accelerating earnings, even as certain consumer-facing segments remain under pressure. The results highlight Abbott’s ability to balance near-term challenges with structural strengths across its diversified portfolio.

A Confident Outlook for 2026

Management guided to organic sales growth centered around 7% for 2026, alongside adjusted earnings per share growth of roughly 10%. Full-year adjusted EPS is expected in the range of $5.55 to $5.80, supported by continued operating leverage and favorable foreign-exchange dynamics. First-quarter guidance implies a steady start to the year, suggesting confidence in demand visibility across core franchises.

Importantly, the company emphasized that its guidance does not assume potential upside from expanded reimbursement for non-insulin continuous glucose monitoring users in the U.S. That decision reflects a conservative stance, leaving room for positive surprises should regulatory or payer dynamics shift.

Margin Expansion as a Strategic Anchor

Abbott’s fourth-quarter performance underscored the durability of its margin story. Adjusted gross margin reached 57.1%, while operating margin expanded to 25.8%, marking a notable year-over-year improvement despite ongoing tariff headwinds. This reflects a disciplined cost structure, product mix improvement, and scale benefits in higher-growth businesses.

Management reiterated its longer-term objective of annual operating margin expansion of 50 to 70 basis points. For investors, this margin trajectory is critical, as it provides earnings resilience even when certain segments, such as nutrition or diagnostics, face cyclical or competitive pressure.

Segment Divergence Tells the Story

The earnings call made clear that Abbott’s growth is not uniform across divisions. Medical devices continue to lead, with sales rising more than 10% in the quarter. Diabetes care remains the standout, as continuous glucose monitoring delivered double-digit growth and surpassed $7.5 billion in annual sales. Structural heart, electrophysiology, and heart failure therapies also posted robust gains, reinforcing Abbott’s strong positioning in procedure-driven, innovation-led markets.

By contrast, the nutrition segment remains challenged. Sales declined as the U.S. pediatric business grappled with market share losses tied to a major contract change and as price increases weighed on volume. Management outlined a recovery plan centered on pricing, promotions, and a pipeline of new product launches, with a return to growth expected in the second half of the year.

Diagnostics also declined, largely due to the fading of COVID-related testing demand. Beneath the surface, however, core laboratory and point-of-care diagnostics showed steady underlying growth, suggesting the segment could reaccelerate as year-over-year comparisons normalize.

Strategic Positioning and What to Watch

Beyond organic growth, Abbott reaffirmed its intent to pursue targeted acquisitions, including the planned purchase of Exact Sciences, while maintaining balance-sheet discipline. With leverage expected to remain manageable, the company retains flexibility for both shareholder returns and selective investment.

Looking ahead, investors should monitor the pace of recovery in nutrition, reimbursement developments in diabetes care, and the sustainability of margin expansion amid global cost pressures. Abbott’s diversified model does not eliminate risk, but it does provide multiple levers for growth in an uncertain macro environment.