Abbott Laboratories

Good morning and thank you for standing by. Welcome to Abbott's first quarter 2026 earnings conference call. All participants will be able to listen only until the question and answer portion of this call. During the question and answer session, you will be able to ask your question by pressing the star 1 1 keys on your touchstone phone. This call is being recorded by Abbott. With the exception of any participants questions asked during the question and answer session, the entire call including the question and answer session, is material copyrighted by Abbott. It cannot be recorded or rebroadcast without Abbott's Express written permission. I would now like to introduce Mr. Mike Camilla, Vice President, Investor Relations.

Good morning, and thank you for joining us. With me today are Robert Ford, Chairman and Chief Executive Officer, and Phil Boudreau, Executive Vice President, Finance and Chief Financial Officer. Robert and Phil will provide opening remarks. Following their comments, we'll take your questions. Before we get started, some statements made today may be forward looking for purposes of the Private Securities Litigation Reform Act of 1995, including the expected financial results for 2026. Abbott cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated in the forward-looking statements. Economic, competitive, governmental, technological, and other factors that may affect Abbott's operations are discussed in Item 1A, Risk Factors, to our annual report on Form 10-K for the year ended December 31st, 2025. Abbott undertakes no obligation to release publicly any revisions to forward-looking statements as a result of subsequent events or developments except as required by law. On today's conference call, as in the past, non-GAAP financial measures will be used to help investors understand Abbott's ongoing business performance. These non-GAAP financial measures are reconciled with the comparable GAAP financial measures in our earnings news release and regulatory filings from today, which are available on our website at abbott.com. Note that Abbott has not provided the related GAAP financial measures on a forward-looking basis for the non-GAAP financial measures for which it is providing guidance because the company is unable to predict with reasonable certainty and without unreasonable effort the timing and impact of certain items, which could significantly impact Abbott's results in accordance with GAAP. Unless otherwise noted, our commentary on sales growth refers to comparable sales growth, which includes the prior and current year sales of Exact Sciences, a cancer diagnostics company that Abbott acquired on March 23rd, 2026. Our definition of comparable sales growth can be found on page two of our press release issued earlier today, and a reconciliation table that contains data needed to calculate comparable sales growth can be found on page 13. With that, I will now turn the call over to Robert.

Thanks, Mike. Good morning, everyone, and thank you for joining us. Our results in the first quarter were aligned with our expectations for the start of the year. That included delivering adjusted earnings per share of $1.15, consistent with our guidance, despite absorbing the impact of earlier than planned financing costs related to our acquisition of Exact Sciences and a week in an expected respiratory season. This quarter also marked an important strategic milestone for Abbott with the completion of our acquisition of Exact Sciences. This acquisition adds a new, high-growth business to the Abbott portfolio. for the strengthening our leadership position in diagnostics and expanding our presence into one of the fastest-growing areas of healthcare cancer diagnostics. As we communicate at the time of the acquisition announcement, we forecast the addition of Exact Sciences to add approximately $3 billion of incremental sales in 2026 and accelerate Abbott's long-term sales growth rate. Before I summarize our first quarter results, I wanted to highlight a few pipeline achievements in our medical device business, and those include an earlier than planned approval and launch of two new PFA catheters, completion of patient enrollment in our catalyst left atrial appendage device trial, initiation of development activities to bring an implantable extravascular ICD product to market, and the announcement of positive results from our randomized control trial. which demonstrated that people with type 2 diabetes on basal insulin therapy benefited from using Libre, including seeing reductions in HbA1c and increased time spent in healthy glucose range. In addition to these achievements, our teams are preparing to initiate patient enrollment in several important clinical trials in the second half of this year. These trials represent a unique opportunity that could position Abbott to bring a new wave of highly differentiated technologies to the market. This pipeline of new technologies includes a balloon expandable TAVR valve, a leadless conduction system pacing device that utilizes our revolutionary AVERE leadless pacemaker, a mitral replacement valve developed following our acquisition of Cephia valve technologies, a peripheral IVL device developed following our acquisition of CSI, and a wearable continuous lactate monitoring sensor that will monitor for sepsis following discharge from a hospital. I'll now summarize our first quarter results before I turn the call over to Phil, and I'll start with diagnostics, where sales increased 2% on a comparable basis. In core lab diagnostics, growth of 3% was driven by growth in the US, Europe, and Latin America. Sales of core lab diagnostic tests, which exclude capital equipment and digital health solutions, increased on both a year-over-year and sequential basis. And this is a trend that we expect to continue and drive higher growth in the second half of the year compared to the first half. In our rapid and molecular diagnostic business, sales declined 10%, reflecting lower demand for respiratory virus testing due to a much weaker respiratory season compared to last year. And in cancer diagnostics, sales grew 13% on a comparable basis, driven by mid-teens growth of Cologuard and high teens growth in international markets. Moving to nutrition, where sales finished slightly ahead of our expectations for the quarter. As discussed on our January earnings call, results in the quarter reflect the impact of lower sales volumes compared to the prior year and the effect of strategic pricing actions implemented in the fourth quarter of 2025 with an objective of re-accelerating volume growth. While we are still early in the transition back toward a more sustainable balance between price and volume-driven growth, I'm encouraged by the progress we're making. Early data indicates we are seeing the intended effect with volume growth beginning to follow our pricing actions. We continue to expect that these pricing actions, combined with the launch of several new products, will result in growth improving over the course of the year. Turning to EPD, our pharmaceutical business, where sales increased 9% in the quarter. Growth was broad-based across the markets we serve, which included double-digit growth in several countries across Latin America and Asia Pacific regions. Demand in these markets continues to be supported by favorable long-term healthcare, economic, and demographic trends. With a broad product offering across five therapeutic areas, and an expanding biosimilars portfolio, which includes several market-leading oncology therapies, we are well positioned to serve the growing customer base in these markets. And I'll wrap up with medical devices, where sales grew 8.5%. Growth was led by strong performance in our cardiovascular device businesses. This included double-digit growth in electrophysiology, heart failure, and rhythm management. In electrophysiology, growth of 13% included contributions from two pulse-fueled ablation catheter launches in the quarter. The launch of our Volt PFA catheter contributed to a growth of 14% in the U.S., and the launch of our TactiFlex Duo catheter helped drive mid-teens growth in Europe. As we broaden the launch of both catheters, we expect growth in our electrophysiology business to accelerate. In rhythm management, sales grew 13% making third consecutive quarter that we have delivered double-digit growth and continued our track record of significantly outperforming the market. In heart failure, growth of 12% was driven by our market-leading portfolio of heart assist devices, which offer treatment for chronic and temporary conditions. In diabetes care, continuous glucose monitoring sales were $2 billion and grew 7.5%. Growth in the quarter reflects an impact from a delay in the renewal process related to an international tender We also saw the expected impact from a challenging comparison to last year. This comparison relates to shelf restocking dynamics that occurred in the first half of 2025, a topic that we discussed on an earnings call last year. As we look forward to the second quarter, we expect CGM to return to double-digit growth. So in summary, our results in the quarter were in line with our expectations to start the year. We remain confident in our expectation for an acceleration in growth in the second half of the year, and we had clear visibility to the key drivers of that acceleration and are highly focused on executing on them. Those drivers include, first, executing our growth strategy in nutrition, which is underway and on track with our expectations. Second, we see a clear path to accelerating growth in both electrophysiology and core lab diagnostics, supported by best-in-class portfolios, new product launches, and improving market conditions. Third, we will continue our proven track record of delivering strong, sustainable performance in EPD and across our medical devices portfolio. And finally, we are successfully integrating ExactSciences, which adds a compelling high-growth business to the Abbott portfolio for the strength and our ability to deliver long-term sustainable growth. And I'll turn over the call to Phil.