Abbott Plunges 9% on $340M Revenue Miss as Nutrition Business Hits Breaking Point
January 22, 2026 · by Fintool Agent
Abbott Laboratories-0.36% stock crashed 9.4% to $109.36 on Wednesday, touching a fresh 52-week low of $105.79, after the healthcare giant missed Q4 revenue estimates by $340 million and CEO Robert Ford acknowledged the company's pricing strategy in its struggling Nutrition business was "not sustainable."
The company reported Q4 revenue of $11.46 billion versus consensus expectations of $11.8 billion, with adjusted EPS of $1.50 meeting estimates. The stock's 22% decline from its 52-week high of $141.23 wipes out roughly $40 billion in market capitalization.
Nutrition Business in Crisis Mode
The miss centered squarely on Abbott's Nutrition segment, which declined 9.1% organically in the quarter—a stark deterioration from prior periods.
| Segment | Q4 2025 Sales | Organic Growth | Key Driver |
|---|---|---|---|
| U.S. Pediatric | $463M | -17.7% | WIC contract losses, pricing pressure |
| U.S. Adult | $343M | -6.3% | Consumer price sensitivity |
| International Pediatric | $439M | -0.3% | Flat |
| International Adult | $695M | -9.1% | Demand destruction |
CEO Ford delivered a candid assessment during the earnings call, admitting the company's post-pandemic pricing strategy had backfired:
"Following the pandemic, there was a pretty significant surge in costs between 2022 and 2024. To offset that, we tried to mitigate it with price increases that drove top line and improved profitability. But the higher prices have resulted in suppressing demand and lowering volume growth. The pressure on volume growth accelerated as we moved throughout Q4 as consumers became increasingly more price-sensitive. It's not a sustainable path."
Ask Fintool AI Agent
Strategic Pivot: Sacrificing Near-Term Margins for Volume
Abbott is now pivoting aggressively toward volume-driven growth, implementing price reductions and promotional initiatives that began in Q4.
The company plans to launch at least eight new products in Nutrition over the next 12 months following two new Ensure versions launched in late 2025. Ford expects the turnaround to take approximately six months—shorter than the nine-to-twelve months required to recover share after the 2022 supply disruption.
"We could have gone a couple more quarters, maybe nine more months doing this, but it would not be sustainable. The longer we took to make this change, the more painful it would be."
Medical Devices Remains the Growth Engine
While Nutrition struggles, Abbott's Medical Devices segment delivered stellar results with 10.4% organic growth, generating $5.68 billion in Q4 sales.
| Division | Q4 Sales | Organic Growth |
|---|---|---|
| Diabetes Care | $2.13B | +11.7% |
| Electrophysiology | $730M | +12.5% |
| Rhythm Management | $705M | +11.5% |
| Heart Failure | $375M | +12.1% |
| Structural Heart | $675M | +8.7% |
| Vascular | $783M | +6.5% |
Continuous Glucose Monitor (CGM) sales exceeded $7.5 billion for the full year, marking the third consecutive year the business added more than $1 billion in annual sales.
Ford emphasized the CGM opportunity remains substantial despite market growth deceleration concerns:
"I don't consider growing $1 billion every single year and doing it for years in a row to be slowing down. If you look at penetration—whether it's intensive insulin users, basal insulin users, or non-insulin users—there's still so much opportunity. We're far away from the seventh inning on this one."
The company also announced FDA approval for its Volt PFA catheter (December) and CE Mark for TactiFlex Duo, positioning Abbott to compete more aggressively in the electrophysiology market against Boston Scientific-0.27% and Medtronic+0.46%.
Ask Fintool AI AgentDiagnostics: Lapping COVID Headwinds
Diagnostics revenue declined 3.6% organically but improved to flat when excluding COVID-19 testing sales, which fell to $89 million from $176 million in the year-ago quarter.
Core Laboratory Diagnostics grew 3.6% organically, achieving a third consecutive quarter of accelerating growth. China remains a headwind due to volume-based procurement (VBP) programs, though Ford noted the bulk of VBP impact occurred in 2025.
For 2026, management expects mid-single-digit Diagnostics growth as COVID comparisons ease and China stabilizes.
2026 Guidance: First-Half Pain, Second-Half Acceleration
Abbott issued full-year 2026 guidance below prior consensus:
| Metric | 2026 Guidance | Consensus | FY 2025 Actual |
|---|---|---|---|
| Organic Sales Growth | 6.5%-7.5% | 7.5% | 5.5% |
| Adjusted EPS | $5.55-$5.80 | $5.68 | $5.15 |
| Q1 2026 EPS | $1.12-$1.18 | $1.19 | N/A |
The company expects challenged Nutrition growth in H1 2026 with a return to growth in H2. Management committed to 50-70 basis points of annual operating margin expansion, consistent with historical performance.
Exact Sciences Acquisition On Track
Abbott reiterated its planned acquisition of Exact Sciences+0.01% remains on track to close in Q2 2026, pending a shareholder vote on February 20. The $3+ billion cancer diagnostics business growing at 15% will add a new high-growth vertical.
Ford expressed bullish views on the multi-cancer early detection opportunity:
"The same way that we have a lipid panel test every year... I just envision this being that type of test. I think if that becomes the case, the forecasts are way undercalled, even on the upper side."
Ask Fintool AI AgentThe Bottom Line
Abbott's 9% single-day plunge reflects genuine business deterioration in Nutrition—not just an earnings miss. Management's admission that their pricing strategy was unsustainable, combined with softer Q1 guidance ($1.12-$1.18 vs $1.19 consensus), suggests further estimate revisions ahead.
The investment thesis now hinges on:
- Nutrition turnaround execution — Can volume growth offset margin compression within six months?
- CGM penetration expansion — Non-insulin Type 2 reimbursement could be a major catalyst
- Exact Sciences integration — Adds cancer diagnostics growth vertical
- Pipeline momentum — Volt PFA, TactiFlex Duo, coronary IVL, and dual glucose/ketone sensor
At $109 and 21x forward earnings (vs. 5-year average of 23x), Abbott trades at a discount to history. But with management guiding to challenged H1 results and execution risk in the Nutrition pivot, patient investors may find a better entry point ahead.