Abbott Laboratories faced significant market pressure following disappointing fourth quarter results and cautious first quarter guidance that fell short of Wall Street expectations. The medical device and healthcare products manufacturer's stock declined sharply as investors reacted to revenue misses and projected earnings below consensus forecasts.

Financial Performance Overview

The company's fourth quarter financial results revealed several areas of concern for investors:

For the upcoming first quarter, Abbott projected adjusted earnings per share between $1.12 and $1.18, trailing the Wall Street consensus estimate of $1.19 per share. The company also provided full-year guidance with expected adjusted profits in the range of $5.55 to $5.80.

Nutrition Segment Challenges

The nutrition division faced significant headwinds during the quarter, with CEO Robert Ford attributing the underperformance to multiple factors. The pediatric division has been particularly affected by competitive pressures following the loss of a key US government procurement contract last year. Additionally, rising production expenses for consumer retail products have created operational challenges.

Ford explained that elevated production overhead necessitated price increases, which subsequently reduced consumer demand as buyers became more cost-conscious. "We'll have a couple quarters here where growth in nutrition is going to be challenged, and then in the second half, we'll return to positive growth," Ford stated during the earnings discussion.

Market Performance and Stock Movement

The market reaction was swift and significant:

Business Segment Analysis

Abbott's medical equipment sales, representing the company's primary business segment, demonstrated resilience by reaching $5.67 billion during the fourth quarter and meeting market expectations. This division provides critical instruments for diabetic patients, including continuous glucose monitoring systems that assist in blood glucose tracking.

The company's testing division has experienced decline in the post-pandemic environment as demand for Covid testing kits diminished. Ford noted that the diagnostic business faced approximately $1 billion in headwinds last year, but expects most of these challenges to be resolved going forward.

Strategic Developments

Abbott continues to pursue growth through strategic acquisitions, including the November agreement to purchase cancer-detection specialist Exact Sciences Corp. in a transaction valued at approximately $21 billion in total equity. This merger is expected to strengthen Abbott's screening capabilities by providing access to diagnostics such as Cologuard, which helps detect colorectal cancer—the second-leading cause of cancer deaths in the United States.

The company maintains a diverse product portfolio spanning surgical instruments, infant nutrition products, and adult nutritional supplements. While the adult wellness segment, featuring protein-rich beverages for individuals using weight-management medications, has shown recent expansion, the baby products division remains involved in legal disputes regarding claims that its formula may cause necrotizing enterocolitis in premature infants.

Engineering and automation major ABB is looking to increase India's contribution to its global revenues before 2030, as the group enters the year with its largest order book ever. President and CEO Morten Wierod shared these ambitious plans during an exclusive interview at the World Economic Forum, highlighting India's strategic importance in the company's global expansion strategy.

India's Energy Leadership Drives Growth Opportunities

Wierod emphasized India's leadership in the energy expansion phase, noting that while the global energy transition remains in early stages, electricity demand is rising sharply across multiple sectors. The surge is driven by economic growth, improving living standards, and the rapid expansion of data centers.

India has demonstrated particular effectiveness in adding renewable capacity, especially in solar and wind power, while simultaneously modernizing grid infrastructure. "India has been really driving that energy expansion," Wierod stated, emphasizing that grid reliability and security are increasingly central to economic resilience.

Automation Key to Managing Power Demand

Automation will play a critical role in managing the rising electricity demand across India's expanding economy. ABB sees automation as essential for reducing stress on power networks and preventing costly outages through improved grid management and smarter energy utilization.

Key automation applications include:

• Grid automation and load balancing systems
• Smarter energy use in commercial buildings
• Industrial process optimization
• Better timing and load balancing capabilities

"Automation is needed to use electricity smarter," Wierod explained, noting that improved timing and balancing of loads can significantly ease pressure on grids without compromising economic growth.

Strategic Manufacturing and Export Hub

India is emerging as a strategic manufacturing and export hub for ABB's global operations. The company already exports from its Indian facilities to markets in the Middle East, Africa, and Latin America, with plans to deepen this role further.

Wierod highlighted India's competitive advantages, including its cost structure, strong engineering capabilities, and execution depth, making it a natural base for serving global markets. Currently ABB's fourth-largest market globally, India is being challenged internally to move up in the company's market rankings.

Ambitious Growth Targets and Investment Plans

ABB aims to push India to the third-largest market position before 2030, with Wierod expressing optimism about achieving this goal earlier than the target date. To support this ambition, the company is implementing several strategic initiatives:

• Expanding manufacturing capacity across key facilities
• Increasing investments in technology and R&D capabilities
• Remaining open to strategic acquisitions that strengthen electrification and automation offerings
• Focusing on adjacencies that enhance core capabilities

The company is experiencing sustained momentum across its core businesses as global investments in power systems and industrial efficiency continue to rise. Under its "leaner, cleaner, faster, stronger" strategy, ABB is positioning competitiveness and sustainability as complementary goals, helping customers improve productivity while reducing emissions.

Market Performance and Future Outlook

Shares of ABB India Ltd were trading 0.80% higher at ₹4,729.00 as of 1:13 pm on Wednesday, reflecting positive market sentiment toward the company's growth strategy. ABB is seeing the twin trends of electrification and automation as multi-decade shifts likely to extend well beyond 2030, rather than short-term market cycles.

As ABB sharpens its focus following the planned robotics divestment, capital allocation and merger and acquisition activities will remain aligned with strengthening core capabilities in electrification and automation sectors.

Source: https://www.cnbctv18.com/market/davos-2026-abb-aims-to-raise-india-share-of-global-revenues-before-2030-ceo-wierod-ws-l-19825352.htm