Jan 22 (Reuters) – Abbott forecast current-quarter profit below estimates after missing Wall Street expectations for quarterly revenue on Thursday, hurt by weakness in its nutrition and diagnostics businesses, sending shares down 7% in premarket trading.
The pediatric nutrition business has been facing heavy scrutiny worldwide after companies such as Nestle, Danone and Lactalis pulled batches of their infant formula amid fears of contamination with a rare bacterial toxin.
Abbott’s baby formula business has been under the scanner since 2022 over lawsuits alleging its specialized formula for premature infants caused babies to develop a dangerous bowel disease called necrotizing enterocolitis.
“Abbott is not impacted by the issues plaguing Nestle and Danone, but there is the potential for a negative aura on formula usage for parents to shift away from this, as we’ve seen in the past” said Bernstein analyst Christian Moore.
Overall sales in Abbott’s nutritional segment fell 8.9% from a year earlier to $1.94 billion, weighed by weakness in pediatric nutrition, reduced volume and recent strategic price cuts.
Its diagnostics segment fell 2.5% from a year earlier to $2.46 billion, missing estimates of $2.51 billion.
The Illinois-headquartered company had warned of a roughly $700 million revenue hit for its diagnostics business in 2025, driven primarily by the steep drop‑off in COVID‑19 testing demand and pricing pressure from China’s volume‑based procurement program, which buys laboratory equipment and consumables in bulk at substantial discounts.
Still, CEO Robert Ford said Abbott is “well positioned for accelerating growth in 2026”, banking on new product launches to revive volume growth.
The medical device maker expects adjusted per-share profit between $1.12 and $1.18 for the first quarter, below analysts’ average estimate of $1.20 per share according to data compiled by LSEG.
The company’s total revenue for the quarter ended December 31 was $11.46 billion, compared with analysts’ average expectation of $11.80 billion.
On an adjusted basis, Abbott reported fourth-quarter profit per share of $1.50, which was in line with analyst expectations.
(Reporting by Kamal Choudhury and Christy Santhosh in Bengaluru; Editing by Krishna Chandra Eluri)
Brought to you by www.srnnews.com