Abbott Labs 1Q13 Earnings Call Notes

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This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

$ABT Earnings Call Notes

“even a bad day in an emerging market looks a lot better than a developed market right now. So when we look at some of these emerging markets and even at the very strong growth rates we see there, they are a little slower than what we may have historically seen in last couple of years”

“I know the senior management at Johnson & Johnson commented a little bit on that yesterday, and I though their comments were quite eloquent about that and quite correct, that it’s going to take a while for [the effect of austerity] to roll through and for businesses or companies to lap the actions we have seen in the developed markets.”

“we don’t want to make our bottom line based on what we do with discretionary spending in SG&A or R&D. that bottom line needs to be driven by core performance at the gross margin level and that’s why we’re putting so much emphasis on the gross margin improvement in the businesses which is going quite well.”

“there is an underlying call it economic malaise or weakens that’s pretty consistent across the developed markets and it’s not unique to the U.S. It’s not unique to Europe. It manifests itself in some different ways depending on how the products are paid for or by whom. Whether it’s patient payer or government payer or third party insurer payer or so forth. But overall, they are pretty similar….Conversely, in the emerging markets, it’s just the opposite. And they are almost uniformly all pretty robust.”

“As [emerging markets] healthcare system expand, as the medical practices expand, as incomes expand and so forth, you actually see the evolution of two or three, sometimes four pricing tiers and segments…In a lot of case the multinationals and or exporters that are not local manufacturers in those markets are in those upper tiers and trying to move down and the local manufacturers in the lower to mid-tier is trying to move up. We see that in almost every business we’re in. but I would tell you in spite of the fact there’s multiple competitors, whether local or multinational and pretty healthy competition amongst us all, we’re all being driven by a heavy tailwind of growth in expansion and utilization in those markets as their healthcare system expands. So you can track in a lot of cases, and we were careful to look at this internally not to get too excited about our growth if we are not taking share. You know we want to be paying attention to whether or not we are winning in these markets and in the competition. It’s wonderful to have the growth but at the same time we are mindful that your competitiveness is measured in your share as well.”

“having the separation activity behind us, we’re able to turn our attention now to what some [M&A] opportunities may be, but it doesn’t mean we’re out on a buying spree either…we’re not U.S versus not U.S or overseas or whatever…it’s often faster to be in the markets in Europe than it is in the U.S these day…But that doesn’t mean you only buy ex-U.S businesses…the U.S is still a very important market to us and it’s one in which we have ambitions to keep growing in our device businesses.”

“I think one of the things that makes any company successful in the M&A or licensing area is that you have done your homework and you have been doing it overtime, so that when you finally decide to make a move with something, you know you have had a lot of diligence and you know why you want to do it and so forth and you are ready.”