From BigGo Finance · BigGo Finance · · 1m 40s
Abbott Spins Off $8.5B Nutrition Unit
Abbott separates nutrition business into independent company, boosting margins while defending its 'position of strength'.
In brief
Abbott separates nutrition business into independent company, boosting margins while defending its 'position of strength'. Abbott will spin off its nutrition business into a $8.5 billion standalone company by end of 2027, improving margins and defending its strategic position. Originally reported by BigGo Finance.
Abbott Announces Nutrition Spin-Off
![[Abbott Laboratories Q3 2026 Earnings Call] Abbott to Spin Off $8.5 Billion Nutrition Unit as CEO Defends 'Position of Strength'](https://img.biggo.com/Y1fHJ3JUjuHeS8V3P9hAhhGhOAd65AG0B50cR_VuBKw/fit/1720/0/sm/0/aHR0cHM6Ly9pbWcuYmdvLm9uZS9uZXdzLWltYWdlL2Vhcm5pbmdzX2NhcmQvMjAyNi0xMC9VU19BQlRfMjAyNi0xMC0yMV8xNzkyNTk1OTQ0LndlYnA.webp)
Abbott Laboratories will separate its nutrition business into an independent, publicly traded company by end of 2027.
New Company Details
The new company has $8.5 billion in annual sales, 16,000 employees, and 14 manufacturing sites.
CEO Defends Strategy
CEO Robert Ford said the move comes from a position of strength, rejecting negative reports.
“I think I read a story that just came out, a headline that just came out on Barron's, who got it totally wrong”
Expected Financial Impact
The spin-off is projected to accelerate sales growth by 50-100 basis points and expand gross margin by more than 200 basis points.
Q3 Financial Results
Abbott reported 7% comparable sales growth and adjusted EPS of $1.42 for the quarter.
Guidance Cut
Management trimmed full-year organic growth outlook to about 6% due to electrophysiology and diabetes market headwinds.
Electrophysiology Headwinds
Left atrial appendage market slowdown and Amulet 360 device launch are impacting growth in electrophysiology.
Diabetes Market Challenges
CGM penetration is slowing without reimbursement expansion, affecting diabetes product growth.
Nutrition Segment Growth
Nutrition segment grew 5% with pediatric sales up 9% and adult sales up 2%.
Cologuard Launch
Abbott launched its first blood-based colorectal cancer screening test on September 30.
2027 Outlook
Abbott expects more conservative top-line guidance for 2027 with potential for growth as the year progresses.
Spin-Off Benefits
The new company will maintain investment-grade credit ratings and pay dividends equal to Abbott's at separation.
The takeaway
Abbott will spin off its nutrition business into a $8.5 billion standalone company by end of 2027, improving margins and defending its strategic position.
