Abbott Falls Most in Nearly 24 Years on Formula Pricing Stumble

Core Insights - Abbott Laboratories has projected that its first-quarter profit will fall short of Wall Street expectations due to the need to offer discounts on nutrition products to attract price-sensitive customers, resulting in a significant drop in share prices [1][4] Financial Performance - The company anticipates adjusted earnings per share for the first quarter to be between $1.12 and $1.18, compared to the Wall Street average estimate of $1.19 [2] - In the fourth quarter, Abbott reported sales of $11.5 billion, which was below the average analyst estimate of $11.8 billion. Nutrition sales were particularly disappointing at $1.9 billion, falling short of the $2.19 billion estimate [3] Business Strategy - Abbott is shifting its nutrition business focus towards sustainable volume growth, which may impact performance in the first half of the year but is expected to position the business for long-term success. The company plans to launch eight new nutrition products in 2026 [5] Market Dynamics - The adult nutrition unit, which includes protein-focused drinks for individuals on weight-loss medications, has seen growth in recent quarters. However, the company faces challenges due to lawsuits alleging that its baby formula may cause necrotizing enterocolitis (NEC) in premature infants [6] Segment Performance - Abbott's largest business unit, medical devices, generated $5.67 billion in sales during the fourth quarter, aligning with estimates. This division includes products that assist diabetics in monitoring blood sugar levels [7] - The diagnostics unit has experienced a decline in demand following the pandemic, particularly for Covid-19 tests. Abbott has agreed to acquire Exact Sciences Corp. for approximately $21 billion, which is expected to enhance its diagnostics business by providing access to cancer screening tests [8]