By Siddhi Mahatole and Puyaan Singh
April 16 (Reuters) – Abbott cut its annual profit forecast on Thursday due to an impact from its $23 billion acquisition of cancer test maker Exact Sciences, sending its shares down 5% even as the medical device maker narrowly beat quarterly results estimates.
The company said the ongoing Middle East conflict had a limited effect in the reported quarter, largely confined to logistical challenges such as tighter shipping lanes, and increased competition for air freight and alternative transport.
Analysts are closely watching for early signs of supply-chain disruption linked to the conflict, particularly for medical device makers relying on complex global logistics networks.
CEO Robert Ford said it was too early to assess any impact from higher oil prices on the company’s costs, and Abbott is not currently seeing increased freight rates from suppliers.
To mitigate those risks, Abbott has increased inventory levels at local affiliates and warehouses to ensure adequate supply and avoid backorders.
NEAR TERM HIT, LONG TERM GROWTH
Including the 20 cent-per-share hit from the Exact Sciences deal, Abbott now expects adjusted profit per share between $5.38 and $5.58 for 2026, compared with its previous forecast of $5.55 to $5.80 per share.
Still, Ford remained upbeat about the deal’s potential to drive long-term growth and said he expects it to add about $3 billion in incremental sales this year.
The deal, one of Abbott’s largest acquisitions, gives the company access to colorectal cancer test Cologuard, helping offset revenue declines from COVID-19 testing kits.
Some analysts were, however, disappointed by the modest quarterly performance. They flagged weakness in the company’s nutrition business, where sales declined, and noted the lighter-than-anticipated growth from diabetes as well as structural heart devices that face competitive pressures from Edwards Lifesciences’ new products.
“Given a noisy quarter, with continued Nutrition weakness…we expect shares to be pressured,” Citi analysts said in a note.
Abbott reported adjusted profit per share of $1.15, beating analysts’ estimate of $1.14, per LSEG-compiled data, driven by growth in cancer diagnostics and medical devices.
“The quarter reflects an impact from a delay in the renewal process related to an international tender,” said Ford, adding he sees continuous glucose monitors returning to double-digit growth in the second quarter.
(Reporting by Siddhi Mahatole and Puyaan Singh in Bengaluru; Editing by Devika Syamnath)
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