Abbott Labs 1Q16 Earnings Call Notes

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Miles D. White – Chairman & Chief Executive Officer

I like what we’re seeing in exchange, but I’m superstitious and in the last two years there have been events in the third and fourth quarters

“look, I like what I’m starting to see is the easing in exchange. But given the last few years, I’m a superstitious person and I think the minute I think this is starting to go well, for some reason we’re going to get smacked down with some change in the market. For the last two years in the third quarter and fourth quarter we’ve seen some events, some economic events of some kind alter the world’s view of economies and then a change in exchange. And more recently, last fall, it was $30 oil.”

All indicators are looking favorable for improvement as the year goes on

“Call it the curve ball discount there, I’m just waiting to see another quarter. And right now, I’d say all indicators are looking favorable for improvement as the year goes on. I actually want to see some of that improvement sustained; meaning, economic conditions and exchange.”

We need to be able to grow by taking share, not just by taking price

” to be truly competitively healthy I think we have to be able to win share, win the shelf space, win the consumer, win the physician, win the recommendation, et cetera; and that’s where we put a lot of our emphasis. So to the extent that we have not put further emphasis on price in the last couple of years, it’s primarily to sharpen our own competitiveness and compete, I’d say, at a pretty effective level on all other dimensions. I think from a business fundamental standpoint that’s important. I want real growth, not just masked growth because we took price.”

The growth rates in China are strong

” The world wrings its hands about slowing growth rates in China; and China was 6.5%. And I think if any other country of the world was growing 6.5%, we’d all be doing cartwheels and investing heavily. We wring our hands when a country as large as China slows to 6.5%. Even if China were at 5%, I’d think it was pretty attractive. So I’d say I think the growth rates, relatively speaking, are strong.”

Everything has slowed some

“I think you have to take into account here that, historically, if one area of the world was struggling, other areas of the world were pretty strong. It’s actually not the case right now. Everything has slowed some, and for all the reasons we know. I think there’s a lot of uncertainties around the world right now and I could run through them, but we’d just be in a bad mood afterwards. And I think everybody’s kind of waiting to see how some things turn out; and whether exchange stays on a certain track, whether some countries kind of recover, I think people are waiting to see what happens with oil and they’re going to wait a while to see that. They’re going to wait to see what happens with the interest rates. There’s a lot of hand wringing, as I said, over negative interest rates.”

Brian B. Yoor – Senior Vice President Finance and Chief Financial Officer

Actual revenues were flat

Okay. Thanks, Miles. First, I’ll provide further details on first quarter results. Sales for the quarter increased 5.1% on an operational basis. Exchange had an unfavorable impact of 5.3% on sales resulting in relatively flat reported sales in the quarter.