A healthcare company making everything from infant formula (Similac) and adult nutrition shakes (Ensure) to the FreeStyle Libre continuous glucose monitor and heart devices like the MitraClip. It was founded in 1888 by Chicago physician Dr. Wallace C. Abbott, who made tiny, precisely dosed pills from plant alkaloids in the back of his drugstore; the company was renamed Abbott Laboratories in 1915. Similac's name comes from "similar to lactation," its original purpose as a breast-milk substitute.
Exact Sciences acquisition lifted Q2 revenue 7.8% but cut EPS 19.7% to $0.61
The acquisition reshaped Abbott's quarter. rose 7.8% to $11.2B and fell 19.7% to $0.61 as integration costs and higher debt weighed on profit, while dipped 0.7 points to 56.2%. Abbott now carries $29.6B of and faces a confirmed $495M verdict on appeal.
Key takeaways
rose to $29.6B, up 132.7% and 199.5% from Q1, after the $20.6B acquisition closed in March and $2.8B of assumed debt was repaid in the quarter, cutting cash and equivalents to $6,803M, down 20.2% from March 31.
rose 7.8% to $11.2B and 12.2% excluding foreign exchange, with up 41.3% from the Cancer Diagnostics addition and up 7.9% ex-FX.
fell 19.7% to $0.61 and dropped 20.6% to $1,345M from a year earlier, with up 30.3% and R&D up 22.9% mainly from integration, equity award cash-outs, and higher legal reserves.
Section summaries
Management's Discussion and Analysis
Q2 2026 net sales rose 12.2% ex-FX, driven by Exact Sciences acquisition and Medical Devices growth, while gross margin dipped slightly.
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Total increased 12.2% excluding foreign exchange in Q2 2026, led by the acquisition (Diagnostic Products up 41.3% ex-FX) and 7.9% ex-FX growth in Medical Devices.
declined 0.7 points to 56.2%, reflecting higher from the deal partly offset by favorable mix and margin initiatives.
The Missouri Court of Appeals affirmed the $495M Gill necrotizing enterocolitis verdict in May 2026, and Abbott is seeking review from the state supreme court; a June 2026 settlement ended six infant formula shareholder derivative lawsuits.
sales fell 5.6% in H1 2026 on lower U.S. pediatric and adult volumes, while grew 8.9% ex-FX led by .
What changed
growth slowed to 7.9% in Q2 from 12.2% a year earlier and 8.1% in Q1, the flagged watch item, confirming the double-digit pace did not return.
sat at $29.6B at June 30 versus the $9.9B year-end 2025 level flagged in the FY2025 10-K, as the $20B acquisition debt hit the balance sheet.
The $495M Missouri NEC verdict moved from under appeal to affirmed by the court of appeals in May 2026, the outcome flagged in the FY2025 watch list.
extended its decline, with H1 down 5.6% after the 7.7% ex-FX drop in Q1, the flagged volume-dip question now two quarters.
Share repurchases under the $7B authorization were not reported for Q2, leaving the pace flagged in Q1 still open.
integration costs drove 30.3% higher in Q2, the trajectory flagged after Q1's 22.2% increase to $3.7B.
What to watch
growth rate in Q3 2026 after Q2's 7.9% to see if the slowdown persists or double-digit pace returns.
and interest cost as the $20B acquisition debt is term-financed from the $29.6B June 30 level.
Supreme Court of Missouri decision on Abbott's review request of the affirmed $495M Gill verdict.
sales trend in Q3 after H1 fell 5.6% to confirm whether the decline is a sustained volume drop.
Pace of share repurchases under the $7B program with $6.7B remaining, not reported this quarter.
Medical Devices grew 8.0% ex-FX in H1 2026, with double-digit gains in Electrophysiology (13.0%), Rhythm Management (10.9%), and Heart Failure (10.4%); Diabetes Care rose 8.2% ex-FX driven by CGM systems.
Nutritional Products sales fell 5.6% ex-FX in H1 2026 due to lower volumes in U.S. pediatric and adult nutritionals; Established Pharmaceutical Products grew 8.9% ex-FX, led by Key Emerging Markets.
declined to 52.5% in Q2 and H1 2026 from 52.7% a year ago, reflecting higher intangible from the deal, partially offset by favorable mix and margin initiatives.
R&D and SG&A expenses surged 22.9% and 30.3% in Q2, respectively, mainly from adding , integration costs, higher legal reserves, and increased selling and marketing spend.
Cash and equivalents fell to $5.1B at June 30, 2026, from $8.5B at year-end 2025, primarily due to funding the $20.6B acquisition and repaying $2.8B of assumed debt.
Abbott is involved in various claims, legal proceedings and investigations as described in its Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 10-K”), including those described below (as of June 30, 2026, except where noted below). While it is not feas…
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Abbott is involved in various claims, legal proceedings and investigations as described in its Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 10-K”), including those described below (as of June 30, 2026, except where noted below). While it is not feasible to predict the outcome of such pending claims, proceedings, and investigations with certainty, management is of the opinion that their ultimate resolution should not have a material adverse effect on Abbott's financial position, cash flows, or results of operations.
In the 2025 10-K, Abbott reported that it is a defendant in numerous lawsuits alleging that preterm infants developed necrotizing enterocolitis as a result of being administered Abbott’s preterm infant formula products. Abbott further reported in the 2025 10-K that in a Missouri state court trial held in July 2024, a jury awarded a plaintiff (“Gill”) $495 million in damages, and Abbott appealed the Gill verdict to the Missouri Court of Appeals in December 2024. In May 2026, the Missouri Court of Appeals affirmed the Gill verdict. Abbott stands by its products and the information it provided about them, and it is seeking review of the ruling from the Supreme Court of Missouri.
In the 2025 10-K, Abbott reported that six shareholder derivative lawsuits had been pending in a consolidated proceeding, In re Abbott Laboratories Infant Formula Shareholder Derivative Litigation, before the United States District Court for the Northern District of Illinois against certain of Abbott’s current and former directors and officers relating to Abbott’s manufacturing of certain powdered infant formula products. In June 2026, the court granted final approval of a settlement of this matter.
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