Abbott Laboratories Cuts Sales Growth View, Plans Nutrition Spin-Off
By Padmanabhan Ananthan and Christy Santhosh
October 21, 2026
1:32 PM GMT+2
Updated October 21, 2026
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Abbott Laboratories logo is displayed on a screen at the New York Stock Exchange (NYSE) in New York City, U.S., October 18, 2021. REUTERS/Brendan McDermid
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Summary
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Companies: Abbott Laboratories
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Abbott to separate baby formula, other nutrition products into new company
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Company cuts 2026 sales-growth forecast to about 6% from 6.5%-7.5%
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Abbott shares fall 4%
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Medical devices revenue misses as heart device sales underperform
Abbott Laboratories (ABT.N) cut its 2026 sales growth forecast on Wednesday and announced plans to spin off its nutrition business into a separate publicly traded company. The move comes amid legal challenges related to its baby formula products.
The separation will involve brands like Similac infant formula and Ensure nutritional drinks, which generated over $8 billion in sales last year.
Relevant to the healthcare industry:
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Abbott joins peers like Johnson & Johnson (JNJ.N) and Medtronic (MDT.N) who have also undertaken business separations to focus on higher-growth segments.
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The nutrition division has faced challenges, including losing a major U.S. government supply contract, rising manufacturing costs, and lawsuits related to its preterm infant formula.
CEO Robert Ford's Outlook:
- Despite the legal issues, Ford expressed optimism on a post-earnings call, stating that outstanding legal disputes are unlikely to delay the separation.
Key Takeaways:
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Strategically, the nutrition business will be a significant focus over the next decade.
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The spin-off aims to shed the beleaguered nutrition unit and refocus Abbott on higher-growth segments.