Abbott's second quarter of fiscal 2026 arrived at the hinge of its biggest strategic move in a generation: the completed $20 billion acquisition of Exact Sciences, a cancer-diagnostics company, folded into its Diagnostic Products segment on March 23. With 122,000 employees and four businesses spanning diagnostics, medical devices, nutritionals and branded generics, the quarter makes sense only when read in two registers at once. The first read looks like a stumble: GAAP diluted earnings per share fell 48% to $0.53, down from $1.01 a year earlier. The second read is closer to an acceleration: sales grew 13% on a reported basis, adjusted earnings rose to $1.31 a share, and management raised its full-year adjusted EPS guidance to $5.45–$5.60. Both registers are true, and the gap between them is the Exact Sciences deal.
What happened, stripped of accounting: the reported 13% sales growth is largely the acquisition itself. Diagnostics sales jumped 42% because it now absorbs Exact Sciences' roughly $3.2 billion of annual revenue (Cologuard colorectal screening foremost among it), taking $6.4 billion of intangibles amortization and acquisition charges onto the income statement in the process. On a comparable basis - growth Abbott itself measures with both Exact Sciences' prior-year sales added back and foreign exchange stripped out - sales rose a slower 4.8% in the quarter and 4.3% for the first half. What it means: the underlying engine, Medical Devices, is the real growth story, up 8.4% on a comparable basis with operating earnings up roughly 10%, carrying the quarter. Diagnostics comparable growth, by contrast, was just 2.9% - the acquired growth is the reported growth, and the organic franchise is building slowly.
The decisive detail is the guidance calibration. Abbott reaffirmed its full-year comparable sales growth target of 6.5% to 7.5% and raised EPS guidance by seven cents at the bottom. After a first half that grew comparable sales only 4.3%, hitting even the low end of that range requires second-half comparable growth well past 9% - a sharp acceleration the company sets up plainly, with CEO Robert Ford saying results "reflect the momentum we are building" and that "accelerating sales and earnings growth" lies ahead. The quarter's real question is not why GAAP EPS fell. It is whether second-half comparable growth actually accelerates as the raised guidance quietly requires. The acquisition explains the past; the H2 acceleration decides the multiple.