# Abbott Laboratories (ABT) Q3 2026 earnings

Results filed 2026-10-21 for the quarter ended 2026-09-30. Source page: https://earnings.opennash.com/companies/abt/2026-q3/
Press release and exhibits: https://www.sec.gov/Archives/edgar/data/1800/000162828026066601/0001628280-26-066601-index.htm
> Summaries and transcripts are machine-generated and can contain errors.

## In brief

Abbott reported third-quarter sales growth of 14.5 percent on a reported basis and 7.0 percent on a comparable basis, with GAAP diluted EPS of $0.53 and adjusted diluted EPS of $1.42.

Abbott's third-quarter sales rose 14.5 percent on a reported basis to $13,013 million, helped by the Exact Sciences acquisition. Comparable sales grew 7.0 percent. Adjusted diluted EPS was $1.42, up from $1.30 a year ago. GAAP diluted EPS fell to $0.53 from $0.94 because of intangible amortization and roughly $670 million of legal settlements tied to infant formula claims. Abbott also announced plans to spin off its nutrition business.
Abbott expects full-year comparable sales growth of approximately 6.0 percent and full-year adjusted EPS of $5.50 to $5.55. Fourth-quarter adjusted EPS is guided to $1.62 to $1.67. The main tension is slower growth in electrophysiology, where the left atrial appendage (LAA) device market is weak, and in diabetes care, where international pricing pressure is rising and U.S. reimbursement has not expanded. The nutrition spin-off adds execution risk and leaves the infant formula litigation unresolved.

## Key numbers

| Metric | Value | Change | Basis |
| --- | --- | --- | --- |
| Net sales | $13,013 | up 14.5% from a year ago | GAAP |
| Comparable sales growth | 7.0 percent | on a comparable basis | non-GAAP |
| Net earnings | $920 | down 44.1% from a year ago | GAAP |
| Diluted EPS | $0.53 | down 43.6% from $0.94 a year ago | GAAP |
| Adjusted diluted EPS | $1.42 | up 9.2% from $1.30 a year ago | non-GAAP |
| Operating earnings | 1,358 | down 34.0% from a year ago | GAAP |
| Adjusted gross margin | 57.2 % | up 140 basis points from a year ago | non-GAAP |
| Adjusted operating margin | 23.4 % | up 40 basis points from a year ago | non-GAAP |

## Segments and operating metrics

| Name | Value | Change |
| --- | --- | --- |
| Medical Devices | 5,826 | up 6.9% reported, 7.8% comparable |
| Diagnostics | 3,305 | up 46.7% reported, 6.4% comparable |
| Nutrition | 2,262 | up 5.1% reported, 4.9% comparable |
| Established Pharmaceuticals | 1,614 | up 6.8% reported, 8.4% comparable |
| Diabetes Care | 2,185 | up 6.2% reported, 6.7% comparable |
| Electrophysiology | 873 | up 15.0% reported, 15.5% comparable |
| Cancer Diagnostics | 968 | up 13.8% comparable |

## Outlook

| Metric | Period | Outlook |
| --- | --- | --- |
| Comparable sales growth | full-year 2026 | approximately 6.0% |
| Adjusted diluted EPS | full-year 2026 | $5.50 to $5.55 |
| Adjusted diluted EPS | fourth-quarter 2026 | $1.62 to $1.67 |
| Foreign exchange impact on sales | fourth quarter of 2026 | negative impact of approximately 1 % |
| Sales growth acceleration excluding nutrition | after the nutrition separation | 50 to 100 basis points |
| Gross margin increase excluding nutrition | after the nutrition separation | more than 200 basis points |
| Operating margin increase excluding nutrition | after the nutrition separation | approximately 100 basis points |

## Key takeaways

1. **Abbott plans to spin off nutrition** The nutrition business, with approximately $8.5 billion in annual sales, would become an independent public company through a tax-free distribution to shareholders. Abbott anticipates completing the separation by the end of next year, subject to approvals.
2. **Full-year sales outlook is approximately 6.0 percent** Management cited slower electrophysiology growth, where the LAA market is weak, and diabetes care, which is now expected to grow in the low to mid-single digits. Full-year adjusted EPS guidance is tightened to $5.50 to $5.55.
3. **GAAP EPS fell on legal settlements** GAAP diluted EPS was $0.53 versus $0.94, while adjusted diluted EPS rose to $1.42 from $1.30. Specified items included approximately $670 million of legal settlements tied to the Gill case and NEC claims.
4. **Electrophysiology grows 15.5% on new PFA products** Comparable electrophysiology growth was 15.5 percent, and TactiFlex Duo received FDA approval, with a broad U.S. launch planned for the fourth quarter. Management expects the LAA headwind to ease with Amulet 360.
5. **Management will guide 2027 sales conservatively** Robert Ford said 2027 sales guidance will start pretty similar to this year, with room to move up. He still expects EPS growth and gross margin expansion.

## Analyst Q&A

- [0:19:15] Robert Marcus, J.P. Morgan: Why is Abbott separating nutrition now, and why a spin-off rather than a sale? Answer: Ford said nutrition needs to invest and adapt to a market shaped by consumer trends and can do so faster as an independent company, and that a spin-off avoids the tax cost and timing uncertainty of a sale.
- [0:28:29] Larry Beigelson, Wells Fargo: Will the NEC liability stay with Abbott, and what drove the revenue guidance reduction and what does it mean for 2027? Answer: Ford said resolving the litigation is not a prerequisite for the separation and both companies will be well capitalized, and he attributed the lower sales outlook to electrophysiology and diabetes, with 2027 sales guidance starting pretty similar to this year.
- [0:43:03] Patrick Wood, UBS: How does the forward pipeline compare with the past, and what does the market overlook? Answer: Ford said the market recognizes the pipeline, which spans conduction system pacing, a mitral valve, TAVR, IVL, a lactate sensor and biosimilars, and that R&D spend is crossing $3 billion this year.
- [0:50:25] Matt Taylor, Jefferies: What explains the trends in cancer diagnostics, Cologuard and the rest of the business? Answer: Ford said the 14% growth fell short of his expectations mainly because of a July cybersecurity event that cost about a point of growth, while Cologuard grew in the mid-teens and the operating margin reached the high teens.
- [0:58:19] Vijay Kumar, Evercore ISI: Was Cologuard Plus reimbursement cut, what is the blood test price, and should 2027 EPS growth be double-digit? Answer: Ford said he would be very surprised if the Cologuard Plus rate went down, declined to disclose the blood test price, and left 2027 EPS guidance to January while saying EPS growth and gross margin expansion are expected.
- [1:02:10] Travis Steed, BofA Securities: What should we expect from the Amulet 360 and coronary IVL data at TCT, and how soon can they launch? Answer: Ford declined to preview the data, said the LAA market needs continued education and investment, and said the coronary IVL approval is expected sometime in the first half.
- [1:06:30] Joanne Wunsch, Citi: When might CMS reimburse CGM for non-insulin type 2 patients, and does the spin affect M&A plans? Answer: Ford would not forecast CMS timing and is not factoring it in, and he said the spin has no impact on M&A, which will likely stay in the tuck-in range with net debt to EBITDA around two times.

## Questions

**What were Abbott's headline third-quarter 2026 results?** Sales rose 14.5 percent on a reported basis to $13,013 million and 7.0 percent on a comparable basis. GAAP diluted EPS was $0.53 and adjusted diluted EPS was $1.42, up from $1.30 a year ago.
**Why did GAAP EPS fall while adjusted EPS rose?** GAAP EPS of $0.53 reflects $0.89 per share of specified items, including $841 million of intangible amortization and roughly $670 million of legal settlements. Excluding those items, adjusted EPS grew 9.2%.
**What is Abbott's guidance for the rest of 2026?** Abbott projects full-year comparable sales growth of approximately 6.0 percent and full-year adjusted EPS of $5.50 to $5.55. Fourth-quarter adjusted EPS is guided to $1.62 to $1.67.
**What is Abbott doing with its nutrition business?** Abbott plans to separate nutrition into an independent public company through a tax-free distribution to shareholders, which it anticipates completing by the end of next year. Nutrition has approximately $8.5 billion in annual sales, and Daniel Salvadori will be its CEO.
**Which businesses are weighing on the sales outlook?** Management pointed to electrophysiology, where weak LAA demand is a headwind, and diabetes care, where growth is now expected in the low to mid-single digits because of international pricing pressure and no expansion of U.S. reimbursement.

## Transcript

Machine-generated from https://www.youtube.com/watch?v=v9yDJpyoYh0


**Operator** [0:00:00]
Good morning and thank you for standing by. Welcome to Abbott's third quarter 2026 earnings conference call. All participants will be able to listen only until the question and answer portion of this call. During the question and answer session, you will be able to ask your question by pressing the star one one keys on your touchtone phone. This call is being recorded by Abbott. With the exception of any participants questions asked during the question and answer session.
The entire call, including the question and answer session, is material copyrighted by Abbott. It cannot be recorded or rebroadcast without Abbott's expressed written permission. I would now like to introduce Mr. Mike Camilla, Vice President, Investor Relations.

**Mike Comilla (Investor Relations)** [0:00:45]
Good morning and thank you for joining us. With me today are Robert Ford, Chairman and Chief Executive Officer, and Phil Boudreaux, Executive Vice President, Finance and Chief Financial Officer. Robert and Phil will provide opening remarks. Following their comments, we'll take your questions.
Before we get started, some statements made today may be forward-looking for purposes of the Private Securities Litigation Reform Act of 1995. Abbott cautions that these These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated in the forward-looking statements. Economic, competitive, governmental, technological, and other factors that may affect Abbott's operations are discussed in Item 1A, Risk Factors, to our annual report on Form 10-K for the year ended December 31, 2025.
Abbott undertakes no obligation to release publicly any revisions to forward-looking statements as a result of subsequent events or developments except as required by law. On today's conference call, as in the past, non-GAAP financial measures will be used to help investors understand Abbott's ongoing business performance. These non-GAAP financial measures are reconciled with the comparable GAAP financial measures in our earnings news release and regulatory filings from today, which are available on our website at abbott .com.
Note that Abbott has not provided the related gap financial measures on a forward-looking basis for the non-gap financial measures for which it is providing guidance because the company is unable to predict with reasonable certainty and without unreasonable effort the timing and impact of certain items, which could significantly impact Abbott's results in accordance with gap. Unless otherwise noted, our commentary on sales growth refers to comparable sales growth. Our definition of comparable sales growth can be found on page two of our press release issued earlier today, and a reconciliation table containing the data needed to calculate comparable sales growth can be found on pages 16 and 17.
With that, I will now turn the call over to Robert.

**Robert Ford (CEO)** [0:03:08]
Thanks, Mike. Today marks an important milestone in Abbott's history. Along with reporting our third quarter results, we announced our intention to separate our nutrition business into an independent, publicly traded company. This decision follows a comprehensive strategic review and reflects our strong belief that both Abbott and the nutrition business can create greater value and achieve their maximum potential as independent organizations. applications. Abbott entered the nutrition business more than 60 years ago.
Since that time, we've built a strong foundation anchored by a talented global organization, iconic brands, and established market leadership positions across the pediatric and adult nutrition categories. The nutrition market has evolved over time, with the pace of change accelerating significantly in recent years. What was once predominantly viewed as a healthcare business market, almost exclusively shaped by healthcare professionals, has increasingly become a market shaped by changing consumer preferences, wellness trends, and retail execution. While this market evolution is not inherently positive or negative, it has fundamentally changed the environment in which we operate.
So to best position our nutrition business for maximum long-term success, we must evolve and adapt accordingly. At the same time, Abbott has strategically repositioned its portfolio over the past decade into attractive, high-growth markets that require sustained investment to drive innovation and support long-term growth. So we believe both businesses will be better positioned for the future as independent organizations, each with a distinct identity reflecting their different customer bases, growth profiles, investment requirements, and innovation cycles.
This separation will enable both companies to sharpen strategic and operational focus, direct resources more effectively, and enhance commercial and R &D effectiveness. As an independent company, nutrition will be uniquely positioned to capitalize on the growing demand for healthy nutrition as consumers increasingly recognize the importance of metabolic health and the role healthy nutrition plays in disease prevention and overall wellness. The new nutrition company will be created from a position of strength. The team has done an exceptional job building a balanced growth model supported by a sustainable mix of volume and price.
The portfolio includes several iconic brands, including Similac, PediaSure, Ensure, Glucerna, and Pedialyte, which have market-leading positions across the pediatric and adult nutrition categories. With approximately $8.5 billion in annual sales, 16 ,000 employees, and 14 manufacturing sites, this will be the largest globally scaled pure play company in the healthy nutrition market. Given its scale and financial profile, we would expect this new company to qualify for inclusion in the S &P 500. I'm pleased to share that Daniel Salvadori, Executive Vice President and Group President of Established Pharmaceuticals and Nutrition Products, will become Chief Executive Officer of the new nutrition company.
Daniel joined Abbott in 2014 as Senior Vice President in our Established Pharmaceuticals business for Latin America and also served as Executive Vice President of Nutrition Products for four years before being appointed to his current position in 2021. Throughout his career at Abbott, Daniel has demonstrated outstanding strategic insight and operational excellence. His broad international experience and proven track record of delivering results as a business operator make him exceptionally well suited for this role, and I'm confident he will be a tremendous success.
Daniel will be joined by an experienced leadership team with deep industry experience, and this is a battle-tested team that has demonstrated exceptional resilience and dedication while while navigating a dynamic and evolving operating environment. Following the separation, Abbott will remain one of the largest, most diversified, and fastest growing healthcare companies in the world. The Abbott portfolio will consist of an even stronger mix of higher growth, higher margin businesses powered by technology and innovation. As a result, we expect Abbott sales growth to accelerate and margin profiles to expand.
While the Abbott portfolio will evolve, maintaining balance across products, payers, and geographies will remain a key strength and source of resilience for the company. We built this portfolio to hold market-leading positions in three of the most attractive areas of healthcare, medtech, diagnostics, and established pharmaceuticals. The portfolio was also intentionally built to align with durable healthcare trends, including an aging population, increasing prevalence of chronic disease, and a growing demand for earlier diagnosis and more personalized treatment.
With market-leading positions, an industry-leading pipeline, and a proven ability to consistently generate strong earnings growth and cash flow, Abbott is exceptionally well-positioned to deliver sustainable growth and create long-term shareholder value in the years ahead. I cannot be more excited about this future. I have tremendous confidence in Abbott's future as an innovation-driven healthcare company, and I'm also confident in the opportunities that lie ahead for the new nutrition company. Most importantly, this creates two stronger organizations that will both continue to fulfill our mission of helping people live better lives.
We look forward to sharing updates on our progress as we move through the separation process. I'll now review the third quarter results before I turn the call over to Phil. Sales grew 7 % in the third quarter and earnings per share grew 9%, representing acceleration and growth on both top and bottom lines compared to our results in the first half of the year. Turning to diagnostics, where sales grew 6.5%, driven by performance in our core laboratory and cancer diagnostic businesses.
Core lab sales grew 5.5%, driven by strong performance in the U .S., Europe, Japan, and Latin America. On our earnings call in July, I highlighted that test volume data sourced directly from thousands of instruments located across the U .S. and around the world showed a pattern of strong and stable demand. We view this as a positive indicator of the underlying demand for healthcare more broadly. During the third quarter, our testing data continued to support that view, with testing demand remaining healthy and at durable levels.
In cancer diagnostics, sales growth of 14 % was driven by Cologuard and contributions to growth from our precision oncology and international businesses. In September, we launched our first blood-based colorectal cancer screening test. As the only company to offer both stool-based and blood-based screening options, we are expanding the options available to health care providers and patients to help achieve the goal of getting more people screened. Turning to nutrition, sales grew 5%, reflecting broad-based growth across all four categories, U .S.
pediatric, international pediatric, U .S. adult, and international adult. As I mentioned earlier, the team has done an exceptional job executing a more balanced growth strategy, achieving a more sustainable mix of volume and price-driven growth. In pediatric nutrition, sales grew 9%, led by growth of 11 % in the U .S. As I noted last quarter, the strong performance in the U .S. includes the benefit from WIC contract wins secured earlier this year, which helped Abbott regain its market leadership position in both the WIC and non-WIC segments.
In adult nutrition, sales increased 2%, driven by growth of 3.5 % in the U .S., as retail consumption data continues to trend in a positive direction. We also continue to live strong growth on a sequential basis with worldwide nutrition sales increasing more than $100 million compared to the second quarter. And finally, we continue to make good progress advancing our innovation pipeline. during the quarter we launched a new version of our Similac infant formula made with whole milk.
This new product is the first and only commercially sterile, ready-to-feed liquid infant formula made with whole milk available in the United States. Turning to EPD, where sales increased 8.5 % in the quarter. Our broad portfolio of prescription and over-the-counter medicines, tailored to address local healthcare needs, continues to drive strong growth across emerging markets. Growth in the quarter was broad-based across geographies and therapeutic areas, and this included double-digit growth in several countries across Asia, Latin America, and the Middle East, highlighting the strong and durable demand that has long been a hallmark of this business.
And I'll wrap up with medical devices, where sales grew 8%. Growth was well-balanced across a portfolio led by double-digit growth in electrophysiology and rhythm management. In electrophysiology, our third quarter results reflect the early beginning of our growth acceleration phase. Growth in the quarter was mid-teens or high-teens when excluding LAA. In the U .S., growth was in the high-teens and exceeded 20 % excluding LAA. This performance was driven by increasing adoption of our new Volt PFA catheter with momentum accelerating in September following the transition to a full U .S.
market release in mid-August. International growth also accelerated as we continue to capture market share in Europe, driven by increasing uptake of our new PFA catheters and growth in other categories across our broad portfolio. In September, we received FDA approval earlier than expected for our TactiFlex Duo catheter. This catheter enables physicians to seamlessly switch between using RF and PFA energy during a procedure. Given physicians' familiarity with the TactiFlex platform, we expect to execute a broad U .S.
launch starting in the fourth quarter. In the third quarter, we also received CE mark for our new Amulet 360 left atrial appendage device designed to help reduce the risk of stroke in patients with AFib. We look forward to bringing this new technology to the U .S. In rhythm management, sales grew 10%, driven by increased adoption of AVER across both single and dual chamber segments of the pacemaker market. This expanding use of AVER is occurring in both the U .S.
and international markets. And in diabetes care, continuous glucose monitoring sales grew 8 % in the quarter. In August, we received FDA approval for LibreDuo, the world's first dual glucose ketone bioarible sensor. This marks the first time that people with diabetes will be able to monitor ketones without the need for traditional blood or urine tests. We expect to launch this new sensor in the U .S. in December. So in summary, we delivered an acceleration in growth on both top and bottom lines.
Innovation continues to be a key differentiator for Abbott. highlighted by multiple new product approvals and launches that further strengthen our ability to deliver sustainable growth in the years ahead. And we took an important strategic step towards shaping our future through the planned creation of a new market-leading nutrition company. I'll now turn over the call to Phil.

**Phil Boudreaux (CFO)** [0:14:56]
Thanks, Robert. Let me begin my remarks with an overview of some of the key aspects of our planning process for the separation.
The new nutrition company will become a publicly traded company through a planned, tax-free distribution to Abbott shareholders. Upon completion of the separation, Abbott shareholders will own shares of both Abbott and the new nutrition company, enabling our shareholders to participate in the value creation opportunities of both businesses. The final share distribution ratio will be communicated prior to the separation, which we anticipate completing by the end of next year, subject to the required approvals. We expect to incur separation-related costs as we progress through the separation process.
These costs will be treated as specified items and excluded from adjusted earnings. As a result, we do not expect the separation to have an impact on the requirements we plan to provide in January. As we prepare for this operation, we intend to establish capital structures that ensure both companies have a strong financial foundation. This includes ensuring adequate capital to support long-term growth objectives and capital allocation priorities while maintaining strong investment-grade credit ratings for both companies.
As part of that process, we are planning for the new company to raise debt with a portion of the proceeds to be distributed to Abbott. The amount of debt to be raised and the amount to be distributed to Abbott will be determined at a later date. Finally, we expect that both Abbott and the new nutrition company will pay a dividend that when combined will equal Abbott's dividend at the time of the separation. Following the separation, we expect Abbott's financial profile to reflect an acceleration in the sales growth and increased profitability.
Excluding the current profile of the nutrition business from the current profile of the AVID portfolio, we would expect sales growth to accelerate by 50 to 100 basis points, gross margin as a percent of sales to increase by more than 200 basis points, and an operating margin as a percent of sales to increase by approximately 100 basis points. Now, turning to our third quarter results, sales increased 7 % on a comparable basis, and adjusted earnings per share of $1.42 was in line with our guidance and the consensus estimate.
Foreign exchange had an unfavorable year-over-year impact of 0.4 % on third quarter sales, which was a slight improvement compared to our expectations at the time of our earnings call in July. Regarding other aspects of the P &L, the adjusted gross margin profile was 57.2 % of sales, representing an increase of 140 basis points compared to the prior year. The improvement in gross margin was broad-based, reflecting favorable business mix within the legacy Abbott portfolio and from the addition of exact sciences, as well as the continued operational improvements and disciplined execution of our margin expansion initiatives.
Adjusted R &D was 6.9 % of sales and adjusted SG &A was 26.9 % of sales. Our operating margin of 23.4 % expanded by 40 basis points compared to the prior year. And based on current rates, we expect exchange to have a negative impact of approximately 1 % on fourth quarter sales. For the fourth quarter, we forecast adjusted earnings per share of $1.62 to $1.67. With that, we'll now open the call for questions.

**Operator** [0:18:46]
At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star 11 on your telephone. You will then hear an automated message advising you that your hand is raised. To withdraw your question, please press star 11 again. For optimal sound quality, we kindly ask that you please use your handset instead of your speakerphone when asking your question. Again, that's star 11 to ask a question.
Please stand by when we compile our Q &A roster. And our first question will come from Robert Marcus from J .P. Morgan. Your line is open.

**Robert Marcus (J.P. Morgan)** [0:19:27]
Great. Good morning. and thanks for taking the questions. I'm sure others will ask on the business and the guide, but Robert, given the news this morning on nutrition, I wanted to start with that to make sure we address it. Maybe you could run through the strategic rationale. Why now? Why spin versus sell?
And any other important points you want to highlight for us? Thanks a lot.

**Robert Ford (CEO)** [0:19:56]
Sure, Robbie. I actually think that's the right call to start off, the right question to start off with, to be quite honest. It's a pretty big announcement for us, and we've gone through a lot of work to be able to make this announcement today. I've seen a lot of notes be written about the portfolio, and all of those notes are from some of the parts and growth rates and impacted growth rates and margin profiles.
And I think Phil mentioned some of those. And those are all, I would say, good outputs of a decision like this. But I think it really starts with a very simple, as I laid it out, which is there's a huge opportunity that I think is building in this market, in this segment. And we're seeing a shift towards a much more healthy nutrition behavior from consumers, not just in this country but around the world. You're seeing a lot of traditional food companies try to reposition their portfolios, moving away from ultra-process to try and look at their portfolios and ultimately try and build portfolios that try to mimic actually the portfolio that we actually have today.
So I just think that strategically over the next decade, there's going to be a lot of segments in this nutrition business that we've built that are going to be very differentiated and kind of high growth. And if you look at nutrition's portfolio, its position today, the capabilities that it has, it is destined to be a market leader and a market shaper of that entire segment that's going to have this accelerating growth here. But they are going to need to adapt, as I said in my comment.
and they are going to need to evolve. And ultimately, they are going to need to invest, invest in kind of sales and marketing, even maybe look at tuck an M &A from their perspective to accelerate their growth rates and all of that. And we just came to the conclusion that this was too exciting of an opportunity, and we just believe that all the things that they would need to do, they'd probably be able to do it faster and more efficiently and effectively as an independent company.
So it really just comes down to that. Yeah, there's the, I would say, the ancillary effects of those decisions, Robbie. I think you've written good, you know, done a good analysis on that in terms of what that does to our growth rates and all that. But I think it really comes down to really the driver of the decision is this is going to be an exciting space. and as a result we think that the nutrition business is going to be able to capitalize better on that by being an independent company.
From a financial asset perspective, I think this is going to be a very, you know, as we look at the spin, I think this is going to be a very, very unique asset. If you benchmark it versus its category peers and not necessarily versus kind of the medtech peers that they're currently part of right now, it'll be a very differentiated asset, whether you think about growth, mix, the scientific capabilities it has, its growth prospects. It's going to be, as I said, the only truly global scale pure play in this kind of healthy nutrition.
So I think this is going to be a very, very distinct asset. To your question on why now, listen, we've got a history of shaping the company. I think that's one of the hallmarks of Abbott, and that's, I think, why we're still relevant today after 138 years, is that we will look at shaping the portfolio to align to where we see the market trending and where we see clinical needs and problems to be solved occurring. But as you do that, you also need to be thinking about sequencing.
And I think sequencing is a key element as you think about, you know, shaping the portfolio. And there are very different elements of shaping. But for me, from an operational standpoint, I just think you need to be mindful of kind of organizational bandwidth and ability for the organization here to absorb the moves. So, you know, we have an order of events in mind of how we're thinking about things. I think, you know, we identify, for example, if you go back a couple years, We identified precision diagnostics as the next area that we wanted to be a part of.
So we announced our acquisition of Exact Sciences last year. The integration has gone great. Actually, I think we've done a lot of heavy lifting in these first six months. We've got a lot done. I'm sure we'll talk about that too. So I just think that now is the right time to start that process of creating the new company. It's coming from a position of strength, as I said in my comment. And I think I read a story that just came out, a headline that just came out on Barron's, who got it totally wrong.
I'm just going to say it. I mean, it's coming out of a position of strength. And we've got a very sustainable growth model. If you look at the volume growth that nutrition had this quarter and what we're projecting to have in the next few quarters, it is significantly higher than what its peer set is, given the portfolio that we built and the segments that we're in. So the business has returned to growth. The pipeline is very healthy.
We're bringing innovations to the market. There's going to be a lot of interesting innovation over the next kind of 12 months here. Got strong brands, experienced and very capable team. As I said in my comment, I specifically chose the term battle-tested because that's kind of what it felt like over the last four or five years. And if I had to pick a team to go into battle with in this nutrition space, I'd pick that team.
I think they've navigated very well everything that they've done and all the environment that they've operated in. So I think this is just a unique opportunity for us and for the nutrition business. And, you know, and I think you had a question on spin versus sell. Yeah, I mean, we just thought that this was, after we went through the analysis, you know, after you make a decision that it's probably going to operate better as an independent company, what's the right mechanism there to be able to position it to be a leading company and ultimately to drive shareholder value.
And we just concluded that the spinoff here was absolutely the right approach. You know, a sale of a business like this, you know, as I said, we've been in this business since the 1960s. So you think about the sale, the sale is going to come with an obvious tax implication there. And then a timeline that, you know, is not necessarily within, entirely within our control here. So I think these two factors might be a little bit prohibitive here for anybody that's got any interest.
So we have no interest in selling the business, have no intention to selling, not even looking at selling it, and just think that spinoff is the better value creation for shareholders here. We've done a couple, obviously we've done a couple spinoffs in our history. Those have gone very well. Obviously different circumstances, different times, different management teams. But I think one of the things that is clear to us in these processes is, I think, one of the big indications here of a successful spin.
I think a lot is attributed, I think, to a very highly group of Abbott people that become founders, so to say, of the new company, and they instill a lot of kind of the Abbott kind of culture and the Abbott way of doing things into that business, and I think that helps set a strong foundation here. So, like I said, I think this is a unique opportunity, growing demand for healthy nutrition. This will be a very differentiated asset here, and that's why I thought the spin was the better move here.
And obviously we're going to be working over the next kind of 12 months here to be able to get ready for that. And as we do with these, I think, Robbie, is we're obviously going to prepare to set up the nutrition company for success, but it's also an opportunity for us to relook also at existing Abbott and looking at our cost profiles and things like that. It's going to be a great opportunity for us to relook at everything from that perspective.
So I'm excited about this. I think this was a good process. I think we came to the right long-term strategic decision here, and now it's all about execution. Thanks a lot.

**Operator** [0:28:44]
Our next question will come from Larry Beigelson from Wells Fargo. Your line is open.

**Larry Beigelson (Wells Fargo)** [0:28:51]
Good morning. Thanks for taking the question. Robert, congrats on the nutrition spin. And just confirm, please, that the NEC liability will remain with Abbott. That seems logical from what we've seen from other spins.
And secondly, can you please talk about the drivers of the revenue guidance reduction this year? It looks like it implies about 8 % growth in Q4. And what are the implications for 2027?

**Robert Ford (CEO)** [0:29:20]
Sure. I figured this question would come up, Larry. I thought it would come up a little bit down in the list here. But, well, I mean, I think, like you said, as it pertains to the announcement that we just made, you know, how to deal with litigation matters is, you know, it's a common topic when it comes to business separations.
We're not the first company that's had to deal with this, like you said. I don't think, actually, pretty clear that we don't need to fully resolve the litigation matters. it's not a prerequisite for completing the separation. I'd say both Abbott and the new company are going to be well capitalized, well capitalized to pursue their respective growth opportunities, well capitalized to execute their respective capital allocation priorities that they might have, and also well capitalized to continue to defend the legal positions here.
So I'll provide more details of that as we progress in terms of exactly where the liability will sit. But for me, both companies are going to be super well capitalized to be able to deal with that. At the same time, I think we continue to focus on achieving what we want to be a logical and sensible kind of resolution. You saw we took meaningful step back in August when we settled 2 ,000 claimants. But that settlement in no way reflects any change to the position that I've made here about these products, which is continue to stand behind their efficacy and safety.
They remain essential component to neonatal care. They are a standard of care. I think if these products weren't available, I think you would see a little bit of a public health crisis there. And I think that view is supported by regulators and medical societies, including the FDA, NIH, CDC, and the American Academy of Pediatrics. So I think the litigation environment now is shifting a little bit, I would say, a little bit to our favor. We've prevailed a lot in federal MDL cases, and there's going to be important decisions in both federal and state courts that have helped increase our position.
So we'll provide updates as we go through the process in terms of a little bit more specificity and details, but all I can say is not a prerequisite to resolve it before the separation, and both companies will be well capitalized to be able to deal with this. So, and then, sorry, what was your second question, Larry?

**Larry Beigelson (Wells Fargo)** [0:31:53]
Yeah, sorry. The revenue guidance reduction, I think, to 6 % this year implies about 8 % for Q4. What was the driver or drivers of the, you know, revenue reduction and implications for next year?

**Robert Ford (CEO)** [0:32:08]
Sure, sure. Yeah, listen, our Q3 growth was in line with the expectation of 7%. We had the normal puts and takes, Larry, that you have when it comes to managing a large portfolio like us. We had two businesses that via expectations, one business that met expectations, and then one business that missed expectations. So the reduction in Q4 for the full year around 6%, like you said, implies just north of 8%, which is at least accelerating versus where we were in Q3.
I mean, it's really driven by two businesses here, And I would characterize these as they're not kind of permanent changes to the growth rate. It's just adjusting based on kind of what we're seeing right now, which is EP and diabetes. So let me unpack that a little bit for you. NEP, we're facing some short-term headwind from the dynamics related to the LEA market. It's become an increasingly headwind to our EP growth, not only due to the market challenges that I think a competitor has discussed pretty ample.
But I'd say for us, so we saw that maybe with a quarter or two delayed versus where they were seeing it, and maybe that's just because of our size and market share position. But what was interesting is as soon as we got CE mark for the new LAA device, there was almost like an immediate slowdown in orders here in the U .S., as I think accounts are waiting for the new product. So that's probably a little bit different for us.
And so when I got that, I was like, really? And they were able to show me clearly kind of trends that we were seeing, even with the slowdown and the impact of that CE mark. So I expect that dynamic to be there in Q4. And I think that's going to be the last quarter where we're going to see this dynamic of you know, accelerating kind of ablation business, being offset a little bit by this headwind here.
I think as we bring in 360 to the market, I think we'll start to kind of reignite that growth and capture share. At least that's my goal. But listen, despite the headwind, as I said in the prepared comments, I think the quarter we acted with a lot of great momentum, continue to capture share in Europe. Europe growth was up 25%, and you have both combination. You have both platforms there, Volt and Pactiflex Duo. We're going to launch Volt in Japan sometime in the Q4.
That's going to turn Japan from a headwind to a tailwind for us. Japan kind of followed very much a U .S.-type model where there was very rapid adoption of PFA, so we're excited about coming to the market in the fourth quarter in Japan. And I think both transitioned from limited market release to full market release in the U .S. in mid-August. So Q4, you'll have this kind of full quarter of the impact over there. And the product's doing very well.
And I think that, yeah, I think people might not have understood kind of the dynamics of what a limited market release is and then how you transition to far market release, and I explain why we do that for all of our products. So TactiFlex Duo got approval in September. That came a little bit earlier than I expected. And as I said in the comments, this is one where the TactiFlex chassis, like I'll say, is widely used already.
So we'll probably do a very short limited market release here, very short, and then go to full launch already in Q4. So I think that's going to provide a lot of momentum here. So we've got a lot of catalysts lined up for our EP business. So I think the impact of that is about five points of growth versus where we were previously around 25%. I think we'll be around 20 % in Q4. But I still believe even with that number we're going to be taking market share.
So that's one of the drivers. The other driver is diabetes. You know, I think in the July call, Larry, I talked about that the CGM market had not seen a significant new reimbursement expansion for quite some time, and that led us to revise our diabetes growth outlook to, you know, to high single. If I look into Q4 right now and probably for the next few quarters, I now expect that growth rate to be in kind of that low to mid-single range.
And that really is, that change really reflects, I think, two things. One of them is a little bit of a harder challenge in penetrating the type 2 population in absence of the reimbursement expansion. So that's probably one kind of key driver. And like I said, that's going to be, you know, when we see the reimbursement expansion occur at CMS, then like I said, I think we'll see a very strong kind of reimbursement growth. So that's one element there, Larry.
And I think the other element that we're seeing is a little bit more pricing pressure in the international markets. And, you know, as you might know, you know, we have significant market share in the international markets. If you look at all the major countries, we'll range between 50 % to 70 % market share. And, you know, we've always expected there to be some pricing pressure, especially with the growth of the category and the excitement. And we've been, you know, internationally, I think you see a lot more competition.
And we've been very good. I think the team's done an excellent job through marketing, through clinical, through all the superiority of the product over the last couple of years to be able to defend that. So I actually expected it to be a little bit more price pressure internationally a little bit earlier. So I think the team did a really good job there. But I think our pricing actions here that we're going to have to take internationally are going to kind of mute a little bit of the volume growth that we're seeing.
And, you know, I think it would be a strategic mistake for us to lose market share based on price in these international markets. And, you know, we're not having to match the pricing, Larry, but, you know, I think we're having to adjust a little bit here as we go through this. And I think that's what I'm forecasting here over the next kind of few quarters is we'll make some pricing adjustments. As we do those, we're going to secure longer-term contracts and then also have language there regarding kind of expansions of patient populations also.
So I think you have this dynamic here for a couple quarters in our diabetes business so that we can make sure that we can defend our market share position. And I think what you'll see then is kind of similar to the kind of decisions we've made in other parts of the portfolio where you have a little bit of an impact for a couple quarters, and then you kind of reignite. I don't think this is at all any issue with the market.
I've been pretty adamant about the ability still for there to be lots of market penetration. But, I mean, we're not going to have our heads in the sand here and just think that you've got this great market and not expect there to be some price competition. The good thing for us, though, I would say, is because of the scale that we built and because we've been planning for this and being ready for this, we're going to be able to offset kind of the margin impact of that, you know, through our COGS programs and the things that we've been doing in our manufacturing setup.
So I think that's really the driver. But I would say if you look at we've got plenty of growth opportunities also, Larry, So when I kind of set that target of kind of low to mid, if I look at what we've got ahead of us, Libre Duo is going to launch. We really haven't launched that product yet, and I think that's going to be a nice growth driver for us next year. We're going to have a benefit here in the U .S.
from a pretty significant payer formulary coverage that flipped in our favor, and that's going to go into effect January 1st. So there's a lot of growth opportunities that we've got in our diabetes business. Would I be surprised that we would do much better than that next year? It would not surprise me at all that we would do better. But at this point, I'd say we've got to make sure we get the pricing aspect right, and then as we go through the year, we'll be factoring in some of these growth drivers and the implications that they have.
So if you think about 2027, then I think as you're looking at, okay, how does that translate into 2027? I expect to see acceleration in our total company growth rate, and there's a lot of reasons why we would expect that. But I would say we're probably going to take a little bit more of a conservative approach here in terms of how we've guided historically, at least on the top line. We've maintained, I'd say, a pretty impressive track record for delivering on our EPS targets.
I think if you go back for the last six years, we've met or beat our EPS targets every single quarter. and if you look at the annual growth rate of those, of what we've been doing to our EPS, it's been around 9 % EPS growth. So I think we've been really good and strong over there. As it relates to our top line, I think we've been very good, but I'd say the track record here in the last couple of quarters, or especially during this year, has been a little bit more inconsistent, let's call it like that, and we've fallen short from some of the expectations.
So I think for 2027, I think we'll set our guidance that's going to create opportunity for us to move up from there in January. I'm not going to give an official guidance here before our January's call, but high level, I'd say forecasting sales to be, you know, as we come out of the gate, pretty similar to this year. And I think that's just probably feels like the right place to start. And Larry, I say that while I acknowledge that we have a lot of new product launches this year.
There's a lot of carryover from the products we launched this year into next year. There's a lot of new products we're launching in 2027. I get that there's probably some comps also, especially in the first half. So I get all that. And all of that would obviously say, hey, you probably can accelerate your 2027 growth versus your 2026. I strongly feel that that's going to be the case. But I said, you know, to start off, I think we'll take a little bit more of a different approach than what we've done in the past.
And then we'll be able to kind of go up and move up from there. That being said, you know, we're still going to have great opportunity for gross margin and gross margin expansion. We're still going to have earnings growth. We're still going to be investing in our near and long-term product pipelines. We're still going to be able to generate real strong cash flows. We'll grow our dividend, all the stuff that, you know, you would expect from Abbott.
We're going to be doing all of that. But I think that's probably the prudent way to start the year, and that's going to give us the opportunity to kind of move up through as the year progresses.

**Larry Beigelson (Wells Fargo)** [0:43:16]
All right. Super helpful. Thank you.

**Operator** [0:43:18]
Thank you. Our next question will come from Patrick Wood from UBS. Your line is open.

**Patrick Wood (UBS)** [0:43:23]
Beautiful. Thank you so much for the question. I really appreciate it. I'd love to start on the pipeline and really just dig into that because obviously, you know, you've got conduction system pacing midterm, AMA 360, you know, probably 200 billion of biologic drugs going through LOE.
there's obviously a lot midterm that's going on. And so I guess my question is in two parts. A, how do you feel about the forward pipeline today compared to the forward pipeline in the past? How would you rate it? And B, as you're thinking about it, not asking you to pick your favorite children, but what do you feel like either gets missed by the market or less attention, but something that's really on your radar and very personally a big focus area for you?
Thanks.

**Robert Ford (CEO)** [0:44:07]
Sure. I mean, I love all of our innovations, Pat, so I don't think you're going to get me to go there. But I would say, listen, I think the market recognizes the pipeline that Abbott's built. I don't think that there is a misunderstanding of what we're assembling over here. so I you know we can talk about those but I don't think there's like some misunderstanding I think it's clearly visible to investors that we've got multiple shots we're developing across all of our businesses yeah and some of them will do better than others but I think all of them will have great contributions to our growth rate and yeah all we need is one or two to like kind of
completely blow it out and it kind of changes the entire trajectory but we're building a pipeline of products organically here that we're anticipating what our customers need and we're making those investments. If you look at the R &D spend for Abbott pre-COVID, I mean, we were averaging around 1.7, 1.8 billion. We're crossing 3 billion this year and we'll be increasing that into next year, which was kind of to my comment in 2027. We're going to continue to make our investments.
We're do all that because of how the portfolio is positioned into these very high growth, high margin, and quite frankly, a lot of clinical problems to solve. So I think you mentioned a couple of them there. I've talked about some of them. I'm excited about the, you mentioned right off the get-go, the Avera CSP that's going into trial right now, the Conduction System Pacing Leadless product. I'm excited about that because our goal is to completely change how pacemakers have been used in the past.
And I think our leadless technology shows that that is possible. And we're looking about really building a kind of sustained growth rate. Many people didn't think that CRM was a growth business. We're showing that with good innovation, good insights, good relationships with locales, we can drive that. I'm excited about the mitral replacement valve. I've spent some time close to that program, probably a little bit more closer than others, and had opportunity to interact with the KOLs.
And I know because I've seen how these things play out. I can read people in terms of how they talk about innovations. And you can tell sometimes when innovation is good and it'll compete well. And you can tell when a KOL tells you that this is really going to be a game changer and it's going to change kind of the standard. And I think our Cephia program is going to do that. We've got a balloon expandable TAVR valve going in.
We've got IVL programs on the MedTech. We've got neuromodulation kind of investments that we're making also. We're making investments in our Libre platform, not just on a new diabetes sensor, but also looking at how to use the platform that we've built, the manufacturing, the technology platform to expand into other analytes. And we're going to go into trial with a lactate sensor. But I can tell you there's at least five or six that the team is really excited that we're funding and that we're working on.
Will all of them hit? Probably not. But if two or three hit, it'll be incredible, I think, to be able to kind of leverage that. So I think you mentioned the biosimilars in our EPD business. I mean, yeah, there's a significant amount of LOE that's happening in the biologic space. and a lot of these products aren't available in these emerging markets by decisions from the originators. So this is going to be a huge opportunity for us to leverage the regulatory, the government, the physician, the distribution relations that we have to bring these products on.
And you've got this business that's been growing at least for the last five years between 7.5 % and 8 % pretty consistently every single quarter. I think that that is going to be very exciting also. And then on top of that, we're going to get into a bunch of new tests, new personalized diagnostic tests with our cancer diagnostic business. Extremely, we're going to be reporting data on our MRD test at ESMO. I'm extremely excited about that test.
And I think it's going to provide us an opportunity also to start to be a player or at least to compete effectively in that segment of the market. So I'm sure I'm missing a bunch out already, too, but I'd say there is a deliberate effort on behalf of the entire management team here to make sure that, you know, as we find sometimes challenges and we have to look at our operational expenses, that R &D is really never an area that we're going to touch because we feel that our productivity in that, you know, even with a 7 % profile, we're getting a lot of productivity.
out of the pipeline. So I think that that is ultimately the lifeline that is going to be the growth driver for us. I'm sure that somebody in my team has got a map. I'm sure that my IR team has a map that lists out all the products between, you know, 28, 29, 30, 31. And those are all projects that we're constantly looking at, looking at ways to accelerate them, looking at ways to make them better. So we feel very good about our pipeline.
At the same time, we don't suffer from the syndrome of not invented here. We never have. Do I prefer to have more of my organic innovation being organic? I do. But we've got plenty of capacity also to be able to kind of add to the portfolio. And if we see opportunities to do that, we'll do that. I've talked about probably going forward, at least for the foreseeable future here in the short term, There will probably be more tuck-in deals, but we can do all that.
We can have organic innovation, and we can also look externally. And I think external partners look at Abbott as like, okay, this is a company that can actually make these innovations really impactful and global in the market. So I think we have a good position there too. So Pipeline is super healthy, and if my R &D team is listening to this, they'll probably say, yes, but we could probably use more. They probably have a bunch of projects under the line, and that's good too.
But I think we're investing in all the right areas to be able to sustain our growth.

**Patrick Wood (UBS)** [0:50:31]
Love the color. Thanks so much.

**Operator** [0:50:33]
Our next question will come from Matt Taylor from Jefferies. Your line is open.

**Matt Taylor (Jefferies)** [0:50:38]
Hi, good morning. Thanks for taking the question. I was hoping we could spend a minute or two on diagnostics and focus on cancer diagnostics and the trends there. Looks like you did a little bit better this quarter, but I know you're hoping for a step up into the mid-teens.
Could you just touch on the dynamics with Cologuard, the rest of the business, and maybe give us some thoughts on Freeno?

**Robert Ford (CEO)** [0:51:06]
Sure. Yeah, so we grew 14%. I think consensus was just north of that, like 15%, 15.5%, so it came a little bit short. Was I expecting to do higher than both those numbers? You bet I was. I'd say the biggest driver of that delta versus expectation there was the cybersecurity event that we had in July.
That caused us to lose a little bit of momentum. I think you see a lot of companies, including a few of our healthcare peers, have had to deal with that. Some of them with, I'd say, worse outcomes than what we went through. I think the team did a really good job. I mean, if you think about, you know, an integration process, dealing with a cyber attack is not on the menu. And I think that the guys did an incredible job to be able to mitigate that.
When they did bring me the forecast and they talked about, well, the cyber had an impact, you know, I, as you would expect, I had to double click on that. And we saw a couple of accounts, Matt, because of the connectivity in the system, the way we're connected to the system. We saw a couple systems, you know, shut the connectivity down. until we could bring them evidence that, hey, everything was up to speed. So then when you do that, then you're reverting back to faxes and emails and stuff like that.
So there were notable kind of drops. But then as soon as the systems were turned right back on, you saw that they popped right back up. So those blips, which lasted about seven to ten days, that caused us about a point of growth. So, yeah, I expected to do better than what we delivered. But still, and I know the team did also, but I think they did a really good job managing that. But I think that the growth is great.
I think we're seeing, you know, I'm really pleased with the integration and kind of how things are going. Cologuard grew mid-teams and continues to accelerate. We're seeing growth in new users, which is really important to be able to show that growth in new users. Obviously, the re-screened business is doing very well. The international growth rate is happening. The CareGap program is growing also. It's definitely a growth segment for us. It's just probably a little bit harder to forecast.
And I'm learning a little bit more about the difficulties in that forecasting right now. We obviously build a plan as to when we're going to send these orders out. Obviously, the insurance companies and the health systems will determine when they want that out, and sometimes they're managing their expenses, but it's very clear to me that the need for these programs in place so that it feeds into their star ratings and into all of their Medicare CMS rebates is super important, and they value this hugely.
It's really a question of timing. But we had good growth in our care gap programs, too. So I'd say, you know, from a top-line perspective, I feel very good about, you know, where this business is going. And it's doing everything that we expected it to do. I'm excited about the pipeline also. You mentioned the, you know, the CRC blood test. I mean we just it literally was Matt I think it was like September 30th that they started kind of sending out the emails and starting to promote and all of that so really didn't have much impact in Q3 do I think it's going to have a contribution to our growth rate yeah it will obviously the ASP to that
product is higher than the ASP that we have for ColoGuard So that's going to be a growth driver for us also. You know, it's obviously got a different margin profile as we're working with a partner, but we've factored all that in, not only in our deal model, but as we're going forward. You know, I think it's going to play an important role. Do I think it's the preferred test? No, I don't, nor does the medical societies, the cancer society, and a lot of the standard of care recommendations to go with stool first for a lot of reasons, but predominantly because you've got a better performance in earlier detection, and ultimately that's what screening is all about.
You're trying to detect early. But it does play a role in the portfolio, and I think that gives us the opportunity. As I said in my comments, we're really positioning ourselves here as the only company that has the broadest portfolio with both blood-based and stool-based testing. And I think that puts us in an advantage as we talk to all the different value players, all the different stakeholders in the value chain. I think that puts us in the position of, okay, we've got all the different technologies here to be able to do that.
So I feel good about the test. I think it's going to be an important test to have in the bag, especially for those that aren't doing anything. So maybe this could be used as a way to get them to start to think about it since it's pretty convenient. But we just got to be careful about how these things are promoted and how the accuracy of the information that's being portrayed to the consumer is complete and transparent and some of the deficiencies that the blood still has.
I think it's going to get better. It's got to get better. It will get better. It's just right now the detection on the precancerous lesion side is not as good as what Cologuard is. And then, as I said also, I think the MRD test that we're going to be presenting at ESMO, I think that's going to be a great opportunity. So Pipeline's doing good. The international business, the opportunity to bring this technology international, we've been doing a lot of great work over there.
We've already selected the markets that we're going to go after, and they wouldn't be what you would typically expect those markets to be, but the markets that we feel will have the biggest impact. But I'll tell you what I'm really impressed is kind of the progress we're making from a margin perspective. We're able to do all this, grow the business, invest in the pipeline, and really kind of also change the trajectory of the profitability there. So if you looked at this business and its operating margin profile before we acquired it, it had just turned slightly positive.
We're actually in the Q3 with an operating margin profile in the high teens already with this business. So I think that's very positive also that we can drive the top line and also drive the bottom line. As I've always said, EPS for us does matter. Yes, we do care about the top line, but EPS also matters, and I think the teams have been able to do both of those. So overall, I think the business is going well, and we've got a lot of growth opportunities ahead of us, whether it's with existing products expanding to different areas, segments, countries, or bringing new products to the market also.

**Matt Taylor (Jefferies)** [0:58:19]
Great. Thanks so much for that answer. Appreciate it.

**Operator** [0:58:22]
Thank you. Our next question will come from Vijay Kumar from Evercore ISI. Your line is open.

**Vijay Kumar (Evercore ISI)** [0:58:29]
Hi, Robert. Good morning and thank you for taking my question. I have two questions. Maybe I'll ask both of them up front. one on now, follow up on this Exact. Did Cologuard 2.0, the next-gen Cologuard, did the reimbursement get cut, Robert? And what's the ASP for this blood test rate?
It feels like Exact should accelerate. And then my second question was fiscal 27. Thanks for the color and top line, but should we still be aiming for double-digit EPS growth?

**Robert Ford (CEO)** [0:59:02]
Yeah, sure. Let's talk about your first question regarding Cologuard Plus and getting a reimbursement cut. Listen, Cologuard Plus is a new test. So the process for setting CMS reimbursement is a little bit different versus tests that have been on the market for a while. We've been in active discussions with CMS.
Conversations have been very productive. I'll just say the following. I find it very hard to imagine that when the process is done that the reimbursement rate for Cologuard Plus would go down. And I'm just going to leave it at that. It is an interesting process, very different, I would say, from, you know, kind of NCDs and some of the med tech kind of process. So it is a new – it's a little bit of a new process for us.
but like I said, I'd be very surprised if that were to happen. I think you asked about the price of our blood test. Yeah, I'm not going to divulge that because for obvious competitive reasons, you know, there is a, you know, there's somewhat of a kind of price that's been set by the market right now. You know, we have an opportunity here to think about, you know, broad adoption of the technology. You know, I find it difficult to believe that you'll get, you know, kind of, you know, the kind of uptake in any kind of blood type test, you know, at these rates.
Yeah, they'll show good growth rates and you'll penetrate, you know, a very small part of the market and you'll be able to show, you know. But I think that for this market to really expand, and now I'm going beyond just kind of simple screen. I'm just talking about it just more holistically. if we're going to want to see this type of testing become kind of standard of care, you know, and there's going to be a very large amount of, at least in this country, a forecast is that, you know, 40 % of adults are going to have some level of cancer.
If you're going to have an impact and using diagnostics as a way to kind of help eradicate and bring down these rates and increase survival, like there needs to be a much broader adoption, and you're not going to be able to get that broader adoption with the kind of pricing strategies that are being applied today. So we're being mindful of that, and we're thinking about that. We're in discussions with payers, and we're really looking at how do we compose a full portfolio of cancer diagnostic solutions for those that are paying for it.
So that's what I'll say about pricing right now. And then what was your other question? WGPS for fiscal 27. Is that the last number? Yeah, I get that you guys are going to start to try and triangulate as much as you can there. Like I said, I'm not going to give kind of total guidance on this call. We're probably going to do that in January. All I'll say is, I mean, I gave a little bit in terms of how we're thinking about our top line.
But like I said, we're going to have EPS growth. We're going to have gross margin expansion. We're going to have all the things you would expect and probably leave the actual specific guidance range for EPS and all other elements, cash flow, all of that. We'll leave that to January.

**Operator** [1:02:31]
Our next question will come from Travis Steed from B of A Securities. Your line is open.

**Travis Steed (BofA Securities)** [1:02:37]
Hey, everybody. At TCT in a couple weeks, you've got Amulet 360 pivotal data and coronary IVL pivotal data.
Just curious anything you'd say on that and then, you know, how quickly those products can launch. It seems like doctors are already waiting on Amulet 360 today. Comment on how much share you can take or, you know, kind of view on when the left atrial pinage closure market stabilizes.

**Robert Ford (CEO)** [1:03:00]
Yeah, so you got two important readouts for us at TCT this year. I think we'll have more, but, yeah, I know those will gain a lot of attention.
I mean, I'm not going to preface what the data is going to say. We'll wait for the investigators to kind of, you know, lay out that information. But I think, you know, these are, I think we showed 45 data, 45-day data at the Boston meeting back in January, Travis, for our LAA device. And I think that's a kind of good benchmark to have there. Regarding the market, yeah, I mean, we started to feel some of these challenges, I'd say, maybe one or two quarters after the market leader.
You know, I think that the way to counter that is, you know, there's definitely an opportunity here still to educate, there's an opportunity to make, you know, continued clinical investments, to be able to show the technology. Obviously, the market leader has been doing that, but so have we. I mean, we're going to have a readout of our trial, not next year, but probably the year after that, on our trial versus NOACs. and I just think you've got to keep on investing.
It's clearly a benefit here for the patients and the health systems. They want this. We are investing in a lot of stroke prevention technologies. This is one. It's obviously the one that gets a lot of attention, but we probably have another two or three products that are in early stage in our venture arms that we're also kind of working on because I think this is just going to be a need, a continued need. So I think the market is going to continue to grow, and that's why we're going to continue to invest in it.
In terms of our ability to forecast how much share, I'll let you guys, you'll probably do your checks with physicians and try and triangulate that. I'll let you guys kind of decide what that's going to be. But we think we've got a very competitive product that not only has added some ease of use to its implant, but it also maintains what we believe is a superior SEAL technology there. So, yeah, we feel good about it. And I think on the IDL, yeah, I think this is an interesting category.
You know, it's a billion-dollar-plus market that's growing. You know, we didn't have to spend over $10 billion to get an asset like this. We did it through our acquisition of CSI. The team took over the project, did some modifications, really good work by the team and our partner. And, you know, we filed for, at least for the coronary side, we filed for approval. I don't know exactly when, but I know we're expecting it sometime in the first half.
And maybe we might surprise on the earlier side there. But I think we feel good about it, adding that to the portfolio. I think the vascular team is really looking forward to this. I think you've seen that we've been able to accelerate our growth from kind of a negative flat business to like now consistently delivering mid-single digits, and I think this just adds to the ability to kind of accelerate growth in our vascular business too.
And I think we'll start our peripheral IVL trial at the end of the year. So those two products will add to the growth rate in our vascular business.

**Travis Steed (BofA Securities)** [1:06:42]
Great. Thanks a lot.

**Investor Relations** [1:06:44]
Crystal, we'll take one more question, please.

**Operator** [1:06:47]
Our last question will come from Joanne Wunsch from Citi. Your line is open.

**Joanne Wunsch (Citi)** [1:06:53]
Good morning, and thank you so much for taking the question, and congrats on the nutrition spin. Briefly, can you comment on potential reimbursement from CMS for non-intensive type 2 for CGM use?
And a quick follow-up, Does anything in your pending spin of nutrition impact any of your other strategic plans such as future M &A? Thanks.

**Robert Ford (CEO)** [1:07:17]
Sure. I know this is the – I don't know what kind of – what type of question how we would characterize, but I know it's a big question, which is when do we expect the type 2 non-insulin user reimbursement, CMS reimbursement to kick in. I'm just going to be consistent here, Joanne, is I'm not going to try and forecast that.
What I can say is that the clinical data is significant. It is very real. I know that there are many in those that are making those decisions that believe in the value of data, of predictive data, of using continuous data to be able to kind of shape behavior. I've said this multiple times. You know, CGMs, they are a behavior modification tool. They're not doing anything to your body. They're not changing any of the biology, anything in there.
They're just giving you information. And there's a lot of people that believe that that information is valuable to change behavior, especially with type 2 and non-insulin using patients. And the clinical data that has been presented has shown that. The same way the clinical data with basal patients has shown that too. So there is definitely support for it. There's a clinical support. But trying to forecast exactly when that's going to happen, I am not going to do that.
I am not going to say that it is embedded in a forecast for next year. or right now what I can say is I'm not really factoring it in, but I know that when it does kick in, like we've seen this in the past, acceleration happens. And, you know, when that happens, I think that what we're doing is preparing ourselves to be in the best possible position. It is a different channel, right? You're not in the diabetes endoclinics.
You're in primary care. This is a different – it's a different field of play, and we've been investing in that field for quite some time now. So I think we'll be in a good position to be able to capitalize on that, but trying to forecast it I'm not going to try and do that Joanne But I can say that The momentum To be able to do it the clinical support all of that is all in place It's really a question as to when that's going to happen Sure, you maybe have read the comments the open comment period.
There's plenty of support It's just really an opportunity here as to when that's going to happen And then what was your second question again?

**Joanne Wunsch (Citi)** [1:09:52]
It had to do with nutrition span and if it impacts any of the other changes, M &A, etc. It's the M &A question. It's the M &A question.

**Robert Ford (CEO)** [1:10:03]
That's fine. Listen, the answer to that is a big no. It has no kind of impact. If anything, I'd say once we go through that, I think it even strengthens it even more.
balance sheet is in very good great shape we've got a lot of flexibility you know our philosophy here of you know taking more of a balanced approach i'm not going to give you percentages of how much goes there how much you know but we take a balanced approach we'll grow the dividend next year right we've got uh probably the last big tower of debt pay down related to the saint jude and elira acquisitions will occur this year and then you know we have very few kind of uh debt payments in in the in a couple years following that so i think we'll be in a good position there We'll have opportunity for buyback.
We've got plenty of dry powder there. On the M &A side, yeah, I mean, I said this last time, you know, we're obviously focusing on the exact integration. I think the team has done an amazing job at the speed at which they've done this is really good. Our net debt to EBITDA is going to be around two times. So we still have plenty of capacity. but I would say as we look around, it's probably more in the tuck-in range than it is on kind of more transformative I would say just because I'm not sure I see anything that's terribly exciting out there right now at least kind of in that kind of startup kind of mode.
I think there's some really early stage stuff that we're very excited about and that we're investing in from a venture perspective but we've got plenty of opportunity, and if there's going to be, and if the opportunity aligns with the right moment and sequencing, like I said, we've got capacity to do that. But I'd say they're probably more tucking than anything else. So, no, that doesn't affect our ability to continue to grow the dividend, invest in our organic opportunities, and do an M &A too.
So I think we're in good shape. So I know I've gone over here, and I expected to go over, so I appreciate everybody kind of hanging in there. I'd say, listen, we had a very good quarter, delivered an acceleration on the top and the bottom line. I think to one of the questions that was asked there, as I've said, innovation is the key differentiator at Abbott, and we don't want to be overly reliant on one or two products.
We've got opportunities across all of our businesses, and we've got multiple new product approvals they're going to carry into next year. We're going to have product launches that are going to occur in next year and will ramp up in next year. So I think that that is probably our biggest driver of sustainability here is our pipeline is very healthy. Teams are doing a great job at navigating what I would say is a pretty volatile environment right now around the globe.
and teams have done an incredible job there, and I think they're going to continue to do that job as they continue to be motivated and inspired by the work that we're doing. And, you know, we took this pretty big important step here towards shaping the future, and I think that's how one needs to look at this is, you know, we're not making quarterly decisions here. We're looking ahead to the next five, ten years and what's the right portfolio to assemble, And I think the opportunity that's going to be ahead of this nutrition company is going to be pretty significant.
And I'm excited for them, but I'm also excited for the Abbott portfolio. So thanks for being on the call. Thank you all for your questions.

**Operator** [1:13:38]
This now concludes Abbott's conference call. The webcast replay of this call will be available after 11 a .m. Central Time today on our website at Abbott .com. Thank you all for joining us. This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone have a wonderful day.