Abbott Falls to 52-Week Low on Revenue Miss
Healthcare giant drops 10% as diagnostics segment struggles post-COVID. Medical devices remain bright spot but can't offset top-line shortfall.
Abbott Laboratories hit its lowest level in a year.
Shares dropped 10% Friday to $109.39 after the healthcare giant reported fourth-quarter revenue that missed Wall Street expectations by a wide margin. The stock approached its 52-week low of $105.78 as investors fled a story that's lost its COVID-era momentum.
The selloff erased roughly $20 billion in market capitalization—harsh punishment for a company that technically met earnings estimates.
The Numbers
Abbott reported Q4 adjusted EPS of $1.50, matching the Zacks consensus. That's the good news.
Revenue came in at $11.46 billion, up 4.4% year-over-year but 2.8% below the $11.8 billion analysts expected. Organic revenue growth of 3% also fell short. For a company priced for mid-single-digit growth, missing the top line by $340 million triggers exactly this kind of reaction.
The culprit: diagnostics.
Diagnostic sales declined 2.5% year-over-year on a reported basis. Rapid Diagnostics—the segment that minted money during the pandemic—cratered 18.1%. COVID testing demand continues to fade, and Abbott hasn't found a replacement growth driver.
The Transition Challenge
This is the post-COVID story playing out across healthcare.
Abbott built significant infrastructure around testing during 2020-2022. That demand isn't coming back. Management is now navigating what they called a "challenging consumer and geopolitical environment" while trying to pivot the diagnostics business toward new platforms.
Nutrition also disappointed. The baby, feminine, and family care segment saw volume decline 5% in the quarter—the steepest drop among Abbott's five product categories. Inflation-weary consumers are hunting for deals, and premium brands face pressure.
Medical Devices Deliver
Not everything struggled.
The Medical Devices division posted 12.3% sales growth to $5.68 billion. The FreeStyle Libre continuous glucose monitoring system continues to dominate its category, and electrophysiology procedures rebounded strongly.
This is Abbott's real growth engine. CGM adoption is accelerating globally, and Libre has first-mover advantages that competitors struggle to match. The segment now represents nearly half of Abbott's total revenue.
But one strong division can't offset weakness everywhere else.
Guidance Raises Questions
Management's Q1 outlook came in light. Adjusted EPS guidance of $1.12 to $1.18 trails the $1.20 Wall Street expected. Full-year adjusted EPS of $5.55 to $5.80 brackets the $5.68 consensus but doesn't suggest acceleration.
CEO Robert Ford maintained that Abbott remains on track to deliver 6.5% to 7.5% organic sales growth for fiscal 2026. The market isn't buying it.
Abbott did announce its 54th consecutive year of dividend increases, raising the quarterly payout to $0.63 per share. That's the kind of shareholder return consistency that matters for long-term holders—but dividend announcements rarely stop a falling stock.
Put Activity Signals Hedging
Options traders positioned defensively.
Puts slightly outnumbered calls during Friday's session, with the January 23rd 105.00 put seeing volume of 3,881 contracts. That strike sits just above the 52-week low, suggesting traders are hedging for further downside or betting on a break lower.
The Path Forward
Healthcare has been a mixed bag this earnings season. J&J beat and raised guidance, while Abbott stumbled. Boston Scientific's Penumbra acquisition shows consolidation appetite remains strong.
Abbott's recovery depends on two things: stabilizing diagnostics and maintaining medical devices momentum. The former may take several more quarters. The latter faces increasing competitive pressure from Dexcom and newer CGM entrants.
At $109, Abbott trades at roughly 19x forward earnings—not obviously cheap for a company guiding to flat-ish growth. The 52-week low may not hold if next quarter brings more of the same.