Abbott Laboratories (ABT) - Stock report

Second-quarter reported revenue was $12.6 billion, up 13%, while pro forma sales grew approximately 5.9% after including Exact Sciences in both periods.

Gross margin was 52.5%, with acquisition-related amortization and higher costs partly offset by favorable mix and foreign exchange.

First-half operating cash flow was $3.8 billion, although receivables, pension contributions, cash taxes, and acquisition-related equity-award payments affected the period.

The key operating issue is whether the Exact Sciences acquisition can turn a larger Diagnostics business into recurring earnings and cash rather than remaining mainly a revenue gain.

Sustained demand matters because Abbott funded the acquisition primarily with $20 billion of new long-term debt. Exact Sciences added about $1 billion of sales from March 23, 2026 through June 30, 2026, while its contribution to consolidated net earnings was not material.

Abbott sells repeat-use healthcare products that support testing, treatment, disease monitoring, and nutrition. It makes money when hospitals, laboratories, government agencies, retailers, pharmacies, and consumers keep buying those products across everyday care needs.

Abbott reports four segments: Medical Devices, Diagnostic Products, Nutritional Products, and Established Pharmaceutical Products.

Devices sell treatment and monitoring tools such as glucose sensors and MitraClip. Diagnostics sell testing platforms such as Alinity and ID NOW. Nutrition sells Similac and Ensure. Established Pharmaceuticals sells branded generics such as Creon and Synthroid in emerging markets outside the United States.

Abbott depends most on Medical Devices and Diagnostic Products because those businesses benefit from repeat procedure, sensor, and test use. Together they generated $8.9 billion of sales in the second quarter of 2026, more than the company’s other segments.

That mix matters because Abbott is adding cancer diagnostics through Exact Sciences, acquired for approximately $20.6 billion on March 23, 2026. A new investor should watch whether repeat device and diagnostics demand keeps translating into revenue as the enlarged diagnostics portfolio is absorbed.