Q3 2026 results
| Metric | Result | Change |
|---|---|---|
| Sales growth | 7% | versus a year earlier |
| Earnings per share growth | 9% | versus a year earlier |
| Adjusted earnings per share | $1.42 | in line with guidance |
| Adjusted gross margin | 57.2% | up 140 basis points |
| Operating margin | 23.4% | up 40 basis points |
Guidance and outlook
- The company forecasts fourth quarter adjusted earnings per share of $1.62 to $1.67.
- Full year sales growth is expected to be approximately 6%.
How management sounded
Positive (+6 on our -10 to +10 scale). Management expressed high confidence in the strategic separation of the Nutrition business and the strength of the remaining innovation-driven portfolio, despite some short-term headwinds in Electrophysiology and Diabetes. Management sounded more upbeat than on 8% of the 190 calls we cover; most companies sound positive on their own calls, so the comparison says more than the label.
Q&A summary
Nutrition Spin-off
Asked: Why separate the Nutrition business now?
Answer: Management believes the Nutrition business needs to evolve and adapt to changing consumer preferences and will be more effective as an independent company.
Revenue Guidance
Asked: What drove the revenue guidance reduction?
Answer: The reduction is driven by short-term headwinds in the Electrophysiology business related to LAA market dynamics and pricing pressure in the international Diabetes market.
Pipeline
Asked: How do you view the forward pipeline?
Answer: Management views the pipeline as very healthy and is increasing R&D spending to over $3 billion this year to support innovation.
Cancer Diagnostics
Asked: What impacted cancer diagnostics performance?
Answer: Growth was impacted by a cybersecurity event in July that caused a temporary loss of momentum, though the business is otherwise performing well.
What to watch before the next call
- Progress on the Nutrition business separation process.
- Market share recovery in the Electrophysiology business following the launch of new products.
- Pricing adjustments and market share defense in the international Diabetes business.
