stockrowWhat it does
Abbott Laboratories is a healthcare-products company headquartered in North Chicago and led by Chief Executive Officer Robert Ford. It discovers, develops, manufactures and sells products across four businesses: Medical Devices, Diagnostic Products, Nutritional Products and Established Pharmaceutical Products.
Medical Devices covers heart-rhythm, electrophysiology, heart-failure, vascular and structural-heart devices; continuous glucose monitoring and blood-glucose products; and devices for chronic pain and movement disorders. Its diagnostic business supplies laboratory instruments, tests and automation, including systems used in hospitals, blood banks, commercial laboratories, clinics, physicians’ offices and other care settings. Its nutrition business sells infant formula, pediatric nutrition, adult nutrition and hospital enteral-feeding products. Its established pharmaceuticals business sells branded generic medicines outside the United States, particularly in emerging markets.
Abbott sells directly and through distributors, depending on product and market. It has also added cancer diagnostics through its acquisition of Exact Sciences, and launched its first blood-based colorectal cancer screening test. The company employs 115,000 people, including staff in manufacturing, research, commercial operations and support functions worldwide.
How it makes money
Abbott earns revenue primarily by selling healthcare products under short-term receivable arrangements. Product mix differs by business. Medical Devices generates sales from implanted or procedure-based cardiovascular products and from diabetes sensors, associated software, test strips and accessories. Diagnostics sells instruments, tests, cartridges, automation and informatics tools. Nutrition sells branded consumer and institutional products. Established Pharmaceuticals sells branded generic medicines through wholesalers, distributors, government agencies, healthcare facilities, pharmacies and retailers outside the United States.
FY2025: Medical Devices revenue was $21.4 billion; Q3 2026 diabetes care sales were $2.2 billion. Medical Devices represented 48.3% of FY2025 revenue. Diagnostics revenue was $8.9 billion, while Nutritionals revenue was $8.5 billion and Established Pharmaceuticals revenue was $5.5 billion.
Repeat sales can arise from diagnostic tests and cartridges used with installed instruments, continuous glucose-monitoring sensors and related supplies, and recurring consumer purchases of nutrition products and medicines. Sales are influenced by patent protection, licenses, technological and performance features, and whether a product is included under a contract. Net selling prices are affected by price controls, competition and rebates. In 2025, 44 percent of consolidated gross revenues were subject to rebates and allowances recorded as reductions of revenue at sale; these were concentrated in Nutritionals and Diabetes Care.
Abbott expects to separate its nutrition business into an independent publicly traded company through a planned tax-free share distribution, subject to required approvals. It anticipates completing the separation by the end of 2027.
| Segment | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| Medical Devices | $21.4 billion | 48.3% | 12.6% |
| Diagnostics | $8.9 billion | 20.2% | −4.33% |
| Nutritionals | $8.5 billion | 19.1% | 0.45% |
| Established Pharmaceuticals | $5.5 billion | 12.5% | 6.58% |
Customers and how it sells
Abbott serves several customer types rather than relying on one customer. Medical Devices are sold to wholesalers, hospitals, ambulatory surgery centers, physicians’ offices, consumers and distributors. Diagnostics reaches blood banks, hospitals, commercial laboratories, clinics, physicians’ offices, retailers, government agencies, alternate-care testing sites and plasma-protein therapeutic companies. Nutrition products are sold to consumers and institutions, as well as wholesalers, retailers, healthcare facilities, government agencies and distributors. Established pharmaceuticals are sold outside the United States to wholesalers, distributors, government agencies, healthcare facilities, pharmacies and independent retailers.
The company has no single customer whose loss would have a material adverse effect. It sells through a mix of direct channels, Abbott-owned distribution centers, public warehouses and third-party distributors. International markets accounted for 61 percent of consolidated net sales. The United States contributed $17.1 billion, or 38.6%, of FY2025 revenue, while All Other Countries contributed $16.0 billion, or 36.0%. Germany generated $2.8 billion and China generated $1.9 billion in FY2025. China revenue declined −9.75% from FY2024, while United Kingdom revenue grew 13.1%.
| Region | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| United States | $17.1 billion | 38.6% | 4.92% |
| All Other Countries | $16.0 billion | 36.0% | 8.07% |
| Germany | $2.8 billion | 6.22% | 8.66% |
| China | $1.9 billion | 4.30% | −9.75% |
| Switzerland | $1.9 billion | 4.22% | 7.10% |
| India | $1.9 billion | 4.22% | 2.97% |
| Japan | $1.5 billion | 3.33% | 2.36% |
| United Kingdom | $1.3 billion | 3.02% | 13.1% |
Suppliers and costs
Abbott buys raw materials and supplies from numerous suppliers in the United States and elsewhere. It reported no recent significant availability problems or supply shortages, but operates a large, complex global supply chain. Products are made worldwide and distributed through Abbott-owned facilities, public warehouses and third-party distributors.
Its cost base includes manufacturing and input costs, research and development, commercial spending, regulatory compliance, rebates and allowances, and foreign-exchange effects. In 2025, rebates and chargebacks charged against gross sales were $4.8 billion; cash discounts were $316 million and returns were $236 million. Abbott recorded an operating margin of 18.2 percent in 2025, compared with 16.3 percent in 2024. The change reflected margin-improvement initiatives, partly offset by foreign exchange and inflation.
The planned nutrition separation is expected to create separation-related costs. Abbott expects those costs to be treated as specified items and excluded from adjusted earnings.
- Revenue$44.3B
- Cost of revenue−$19.3B
- Research and development−$2.9B
- Selling, general and administrative−$12.3B
- Other operating costs−$1.7B
- Operating income$8.1B
Competitive position
Abbott competes across medical devices, diagnostics, nutrition and established pharmaceuticals, but does not identify individual competitors in its business description. In Medical Devices, competitive factors include technological innovation, price, convenience of use, service, product performance, long-term supply contracts, cost-effectiveness and productivity gains. Abbott states that technological advantages can be reduced or eliminated when competitors introduce new products. It reported increased competitive intensity in U.S. mitral care after a main competitor expanded its portfolio.
In Diagnostics, competition also includes instrument warranties, laboratory efficiency and rapid product obsolescence. Nutrition competition includes consumer preferences, advertising, formulation, packaging, scientific innovation, price, retail distribution, private-label products and local manufacturers. Established Pharmaceuticals faces other healthcare and pharmaceutical companies, generic substitution and new forms of established products.
Abbott said its diabetes-care share in major international countries ranges from 50% to 70%, and it expects international pricing actions to defend that share amid increasing competition.
Our reading: Abbott’s patents, trademarks and licenses provide a broad but limited moat because it considers no individual right material to the company as a whole.
Our reading: Installed diagnostic instruments, long-term supply contracts and recurring tests or sensors can support customer relationships, but product obsolescence, price competition and regulatory change constrain that protection.
Our reading: The stated international diabetes-care share indicates a meaningful commercial position, while planned pricing actions show that position is contested.
Growth opportunities
Medical Devices has been Abbott’s main recent growth business. Diabetes-care continuous glucose-monitoring systems generated $7.6 billion in 2025. Abbott estimates that 70,000,000 to 80,000,000 people globally should use continuous glucose monitoring.
The company is expanding its medical-device pipeline through electrophysiology, rhythm management, structural heart, diabetes and other monitoring technologies. In Q3 2026, it reported an 8% increase in medical-device sales, double-digit growth in electrophysiology and rhythm management, and 8% growth in continuous glucose-monitoring sales. It received FDA approval for LibreDuo, a dual glucose-ketone sensor, and expects a U.S. launch.
Cancer diagnostics is another development area following the Exact Sciences acquisition. Abbott launched a blood-based colorectal cancer screening test and estimates that 50,000,000 Americans are not up to date with colorectal cancer screening. It also reports that about 200,000 healthcare professionals prescribe Cologuard each quarter.
Established Pharmaceuticals revenue was $5.5 billion in FY2025 and grew 6.58%. Abbott is focused on expanding the depth and breadth of that portfolio in emerging markets, including biosimilars. The planned Nutrition separation would leave Abbott focused on medtech, diagnostics and established pharmaceuticals.
- $43.1BFY2021
- $43.7BFY2022
- $40.1BFY2023
- $42.0BFY2024
- $44.3BFY2025
Structural risks
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Supply chain: Disruptions to Abbott’s large and complex global supply chain could negatively affect results. The company also faces risks from raw-material availability, suppliers, distributors and business partners.
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Regulation and compliance: Development, manufacturing, marketing, reimbursement, laboratory operations, data privacy and cybersecurity are subject to extensive regulation. Non-compliance can delay launches, lead to recalls or seizures, suspend approvals or billing privileges, and result in fines or other sanctions.
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Price and reimbursement pressure: Government agencies, payors and providers seek to contain healthcare costs through reimbursement, payment, pricing and coverage restrictions. Rebates and allowances are a material reduction from gross revenue.
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Competition, product cycles and intellectual property: New products, generic substitution, private-label products, regulatory changes and rapid product obsolescence can reduce demand or pricing. Expiration or loss of patents, trademarks, licenses or other intellectual-property protection may affect revenue and operating earnings.
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International, geopolitical and currency exposure: International markets comprise 61 percent of net sales. Geopolitical and macroeconomic changes, trade and investment restrictions, local requirements and foreign-currency translation can affect operations and reported results.
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Product and legal exposure: Product safety, efficacy and outcomes studies can lead to discontinued marketing and damage claims. It was reported on 26 October 2026 that Abbott faces lawsuits alleging some premature-infant formula products increase the risk of necrotizing enterocolitis.
Bottom line
Our reading
Our reading: Abbott is a diversified healthcare-products business whose largest FY2025 segment is Medical Devices, alongside diagnostics, nutrition and established pharmaceuticals; its planned nutrition separation would change that mix. Our reading: Recurring sensors, tests and branded consumer products, global distribution, intellectual property and product-development investment support the business, but regulation, reimbursement, rebates, product cycles and international exposure remain material constraints. Our reading: Recent growth has been concentrated in medical devices and cancer diagnostics, while diagnostics has faced lower COVID-19 testing demand and challenging conditions in China.