Abbott to spin off nutrition unit, cuts sales outlook

Abbott Laboratories said Wednesday it plans to separate its Nutrition business, the maker of Similac, Ensure, PediaSure, Pedialyte and Glucerna, into an independent publicly traded company by the end of 2027. Abbott said in its announcement that the unit has about $8.5 billion in annual sales. The healthcare company also reported third-quarter results and lowered its 2026 sales growth forecast, and its shares fell in premarket trading, Reuters Thomson Reuters Corporation ↘ 0.07% reported.reuters.com+1

The move would leave Abbott focused on medical devices, diagnostics and established medicines. According to the company, the remaining business would have about $42 billion in sales, as MarketScreener reported.morningstar.com

Deal structure and leadership

Daniel Salvadori, Abbott's executive vice president and group president for Established Pharmaceuticals and Nutritional Products, will become CEO of the new company. He joined Abbott in 2014, and the separated business will have about 16,000 employees and 14 manufacturing sites, Abbott said. Abbott plans to distribute shares of the nutrition company to its shareholders in a transaction meant to be tax-free for U.S. federal income tax purposes. It expects the two companies' combined dividend to equal Abbott's dividend at the time of the split. Completion still depends on regulatory approvals, an effective Form 10 registration statement and final approval from the board.uk.finance.yahoo.com

"This separation will benefit both companies, setting each one up for maximum success in its respective market," CEO Robert Ford said. Abbott said the spinoff will not change its 2026 guidance or the 2027 outlook it plans to give in January. The company expects to take one-time charges and will put a figure on them later, Dow Jones reported.morningstar.com+1

Earnings and a lower forecast

Abbott now expects 2026 sales growth of about 6%, down from its earlier range of 6.5% to 7.5%. Adjusted earnings came in at $1.42 per share, matching analyst estimates, Reuters reported. Third-quarter revenue was $13.01 billion, slightly above the $12.99 billion analysts polled by FactSet had expected, according to Investor's Business Daily. Shares on the NYSE dropped before the market opened, RTTNews reported.finanznachrichten.de+2

A struggling unit

Crain's Chicago Business said the nutrition unit has been through a series of missteps that hurt Abbott's overall results. Reuters reported that the pediatric nutrition business lost a major U.S. government supply contract last year and has faced higher manufacturing costs. Those costs pushed Abbott to raise prices, which in turn cut demand from consumers on tight budgets, according to Reuters.rmb.reuters.com+1

Abbott said the nutrition business will remain part of the company until the separation is complete. Ford argued that as a standalone company it would "be better positioned to focus its resources more strategically," as Bloomberg reported.bloomberg.com