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Abbott Laboratories (NYSE:ABT) dropped some big news on Wednesday: it's planning to separate its global nutrition business into an independent, publicly traded company by the end of 2027. That's the arm behind household names like Ensure, PediaSure, Glucerna, and Similac.
The new standalone would have roughly $8.5 billion in annual sales and 16,000 employees across 14 manufacturing sites. Not exactly a tiny carve-out.
During the earnings call, CEO Robert Ford made it clear that selling the nutrition unit was never on the table. He said Abbott has 'no interest' in a sale and believes a spinoff would create greater shareholder value while avoiding potential tax complications. So if you were hoping for a big check from a strategic buyer, don't hold your breath.
The division has been busy, too. It launched 10 products in the first half of 2026, including an Ensure shake packing 42 grams of protein, a ready-to-feed whole-milk Similac infant formula, and dye-free Pedialyte products. Daniel Salvadori, Abbott's executive vice president and group president of established pharmaceuticals and nutritional products, will become CEO of the new company.
Abbott said the separation won't affect its 2026 guidance or the 2027 guidance it expects to issue in January. But there will be one-time transaction costs before the deal closes. After the spinoff, Abbott expects its remaining businesses to generate approximately $42 billion in annual sales.
Abbott reported third-quarter adjusted earnings of $1.42 per share, matching the analyst consensus estimate. That was within management's guidance range of $1.38 to $1.46 per share.
Revenue rose 14.5% year over year to $13.013 billion, beating Wall Street's estimate of $12.998 billion. Comparable sales increased 7%. GAAP earnings came in at 53 cents per share, while adjusted earnings rose 9.2% from $1.30 a year earlier. The nutrition business itself generated $2.262 billion in quarterly revenue, up 5.1%, with comparable sales increasing 4.9%.
Abbott narrowed its fiscal 2026 adjusted earnings guidance to $5.50 to $5.55 per share from its previous range of $5.45 to $5.60. Analysts expect earnings of $5.52 per share. However, the company lowered its comparable sales growth forecast to approximately 6% from its earlier projection of 6.5% to 7.5%.
For the fourth quarter, Abbott expects adjusted earnings of $1.62 to $1.67 per share, compared with the analyst consensus of $1.64.
Ford also warned that challenges in the left atrial appendage (LAA) market were increasingly weighing on Abbott's electrophysiology business. He said the company experienced these pressures about one or two quarters later than competitors, possibly because of its larger market share.
Abbott also faces slower growth in its continuous glucose monitoring business. Ford attributed the slower growth outlook to limited insurance reimbursement expansion for continuous glucose monitors and increased pricing pressure in international markets. As a result, Abbott revised its diabetes growth outlook to the high-single-digit range. The company expects growth to slow further to the low- to mid-single-digit range in the fourth quarter and potentially remain at those levels for the next few quarters.
ABT Price Action: Abbott Laboratories shares were down 3.56% at $98.80 at the time of publication on Wednesday, according to market data.
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