ABT · Earnings call · 2026Q3T · Full report

Operating Margin Drivers

ABBOTT LABORATORIES · 2026-10-21 · Importance 24 · Surprise 14

Adjusted gross margin was 57.2% of sales in the third quarter, up 140 basis points year over year. Management attributed the improvement to favorable mix in the legacy Abbott portfolio and the addition of Exact Sciences, as well as operational improvements and margin-expansion initiatives. Adjusted operating margin was 23.4%, an increase of 40 basis points year over year. Management said international diabetes pricing adjustments would be offset through cost-of-goods programs and manufacturing actions.

Key facts

• Abbott’s adjusted gross margin was 57.2% of sales, up 140 basis points year over year.
• Abbott’s operating margin was 23.4%, expanding 40 basis points year over year.
• Abbott said the acquired business had only recently turned slightly profitable before acquisition and was exiting Q3 with an operating margin profile in the high teens.
• Abbott said it is investing in the acquired business's pipeline while improving its profitability and growing revenue.
• Abbott attributed its gross-margin improvement to favorable business mix, including the addition of Exact Sciences, continued operational improvements, and disciplined execution of margin expansion initiatives.
• Abbott’s adjusted R&D was 6.9% of sales and adjusted SG&A was 26.9% of sales.