ABT · 10-Q · 2026Q2 · Full report

Operating Margin Drivers

ABBOTT LABORATORIES · 2026-07-28 · Importance 58 · Surprise 40 · In source text

Six-month operating earnings declined 18.9% to $3.038 billion from $3.745 billion, reducing operating margin to 12.8% from 17.4%. Second-quarter operating earnings declined 17.5% to $1.693 billion from $2.052 billion, reducing operating margin to 13.4% from 18.4%. Six-month cost of products sold increased 9.6% to $10.215 billion, while reported amortization of intangible assets was $1.080 billion in the second-quarter presentation and increased materially following the Exact Sciences acquisition. The acquisition added approximately $0.5 billion of six-month pro forma amortization expense and $0.5 billion of transaction-related costs in the comparable pro forma analysis.

Key facts

• Goodwill reported at June 30, 2026: $35.2 billion and at December 31, 2025: $24.0 billion; goodwill increased by $11.4 billion in the first six months of 2026 due to the Exact Sciences acquisition.
• Goodwill by reportable segment at June 30, 2026: Established Pharmaceutical Products $2.7 billion; Nutritional Products $0.3 billion; Diagnostic Products $15.0 billion; Medical Devices $17.3 billion.
• Net earnings allocated to common shares for the three months ended June 30, 2026: $0.9 billion and for the three months ended June 30, 2025: $1.8 billion; for the six months ended June 30, 2026: $2.0 billion and for the six months ended June 30, 2025: $3.1 billion.
• Net earnings for the three months ended June 30, 2026: $1,779 million and for the three months ended June 30, 2025: $2,005 million.
• Amortization of intangible assets in the six months ended June 30, 2026 is shown as ($1,080) million in the reconciliation.
• Other (income) expense, net was income of $293 million in the first six months of 2026, compared to income of $264 million in the first six months of 2025.
• Net earnings for the six months ended June 30, 2026: $3,104 million and for the six months ended June 30, 2025: (implied) $? (but $3,104 is shown for 2026 six months).
• Other (income) expense, net was income of $134 million in the second quarter of 2026, compared to income of $137 million in the second quarter of 2025.

Impact estimates