The investor's view
+5.1%
growth in revenue a year, FY2020 to FY2025
- Five fundamentals, each ranked against the Health Care companies covered
- A peer map of growth against margin
- Where the profit is made: 4 segments, by share of sales and of profit
One segment earns more than the whole company
Q2 FY2026, the quarter to Jun 30, 2026 · 10-Q filed Jul 28, 2026
Largest source of revenue: Medical Devices, 46.5% of the total.
Medical Devices earns more than Abbott does in total, because costs held outside the segments outweigh what the others earn.
Medical Devices brought in $5.85B of the quarter's $12.6B net sales, 46.5%, and $1.97B of segment operating earnings, a 33.6% segment margin. Abbott's operating earnings were $1.69B, so this one segment's earnings equal 116.3% of the company total.1
The other segments earn at lower rates: Established Pharmaceutical Products 25.5% on $1.50B of sales, Nutritional Products 17.2% on $2.14B, and Diagnostic Products 16.1% on $3.09B, a segment that now includes Exact Sciences.1
AnalysisThe gap between segment earnings and the company total is cost the segments do not carry, such as amortization of acquired intangible assets and corporate and legal costs. Reading the segments alone overstates what the business keeps; reading the total alone hides how concentrated the earning power is.
AnalysisMuch of what the segment sells is used up and replaced, such as glucose sensors and single-use catheters, and the filing names continuous glucose monitors and ablation catheters among its growth drivers. That repeat demand is a plausible reason the segment earns well above the margin of nutrition.
Product cost fell as a share of sales, but selling and administrative cost rose faster, pulling operating margin down to 13.4%.
Cost of products sold, before amortization, fell to 42.3% of net sales from 43.6% a year earlier. Selling, general and administrative cost rose 30.2% to $4.03B, 32.0% of net sales against 27.7%. Operating margin fell to 13.4% from 18.4%.1
The filing attributes the rise in selling, general and administrative cost to the addition of Exact Sciences and related integration expenses, higher legal reserves, increased selling and marketing spend to drive growth, and the unfavorable impact of foreign exchange.1
Two other lines added to the squeeze. Amortization of intangible assets rose 56.7% to $658M, 5.2% of net sales against 3.8%, and research and development rose 23.0% to $892M, 7.1% of net sales against 6.5%. The filing ties both largely to Exact Sciences.1
AnalysisIntegration expense and legal reserves would fade if they are one-time; the selling and marketing push is meant to stay. Whether the share of sales spent on this line falls back as integration ends is the clearest test of how much of the margin loss is temporary.
Operating earnings fell 17.5%, but heavier interest and tax cut net earnings nearly in half, to $928M.
Interest expense rose to $351M from $121M, which the filing ties to debt incurred for the Exact Sciences acquisition. It absorbed 20.7% of operating earnings, against 5.9% a year earlier.1
Taxes on earnings rose to $596M from $371M, 39.1% of earnings before taxes against 17.3%. The filing says the year-to-date tax charge includes expense related to a deferred tax asset recognized as a significant non-cash benefit in a prior year, and net expense from resolving prior-year tax positions.1
Earnings before taxes fell 29.1% to $1.52B and net earnings 47.8% to $928M, while net sales rose 13.0% to $12.6B. Diluted earnings per share fell to $0.53 from $1.01.1
AnalysisPart of the tax charge relates to earlier years, so this quarter's rate does not describe a normal quarter. The interest is different: it follows the acquisition debt and remains while that debt is outstanding, which makes it the lasting part of the gap between operating and net earnings.
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Business Lens describes Abbott Laboratories from its own filings with the SEC. It is not a view on its shares, a target, or advice to buy, sell or hold anything; figures are as filed and may be restated by the company later. The filing, the dates and the version are under the financial data above.