Abbott Laboratories

Abbott plans to separate Nutrition into an independent, publicly traded company (major strategic “surprise”) - Separation announced alongside Q3 results: tax-free distribution to Abbott shareholders (planned completion by end of next year, subject to approvals). - Nutrition will be a globally scaled pure-play healthy nutrition company with ~$8.5B annual sales, ~16,000 employees, 14 manufacturing sites; CEO will be Daniel Salvadori (current Exec VP & Group President). - Management rationale: growing consumer shift toward healthier nutrition; Nutrition needs freedom to invest faster (sales/marketing, potential tuck-ins) and sharpen focus to capture an “accelerating” opportunity. - Spin vs sell: Abbott says selling would bring tax/timing constraints; spin is viewed as best for value creation. - Dividend expectation: both Abbott and Nutrition will each pay dividends such that combined dividends equal Abbott’s dividend at separation.

Q3 financial performance: growth acceleration on top and bottom line - Sales +7% (comparable); EPS +9%, described as acceleration vs first half. - Diagnostics: sales +6.5% (core lab +5.5%; cancer diagnostics +14% driven by Cologuard, precision oncology, and international). - Nutrition: sales +5% broad-based across U.S./international pediatric and adult; pediatric +9% with noted WIC contract wins earlier in the year supporting share recovery; adult +2% (U.S. retail consumption trending positive). - EPD (Established Pharmaceuticals): +8.5% with broad geographic/therapy growth, including double-digit growth in parts of Asia/LatAm/Middle East. - Medical devices: sales +8%, led by electrophysiology/rhythm management and strong adoption of newer platforms/catheters and continuous glucose monitoring (CGM +8%).

Full-year guidance / forecast: Q4 implied stronger growth, but company lowered revenue growth outlook - Phil cited Q4 guidance leading to ~6% full-year revenue growth, implying ~8% growth in Q4 (investor interpretation; management confirmed the math direction). - Key message: Q3 growth met expectations, but two businesses beat, one met, one missed, leading to the adjustment. - Drivers of the weaker outlook (esp. Q4): - Electrophysiology headwind tied to LAA market dynamics and “accounts waiting for the new product” behavior after CE Mark for Amulet 360; Abbott expects this to be a couple-quarter dynamic and the last quarter to show the offset. - Diabetes: growth revised to low-to-mid single digit in the near term due to less penetration in type 2 without reimbursement expansion and international pricing pressure. - Management expects re-acceleration after these short-term effects via catalysts (U.S. EP full-market releases, launches, share capture, and later reimbursement changes).