Abbott Labs 2Q16 Earnings Call Notes

Abbott Laboratories (ABT) Miles D. White on Q2 2016 Results

Acquired St. Jude

” As you know, earlier in the quarter, we took an important strategic step with our announcement to acquire St. Jude Medical. Abbott and St. Jude combined will have a highly competitive medical device portfolio, including an industry-leading new product pipeline across cardiovascular, neuromodulation, diabetes and vision care.”

There’s not a lot of enthusiasm for anything out there right now

“. I mean I think that first of all I’d say, it’s not a skeptical or cautious attitude on the part of investors, with just about everything, not particular to Abbott or specific to Abbott, but I think there is just a lot of caution out there. All that frothy, robust enthusiasm of a year and a half ago is definitely not there now. And yet the market is at a near high, but in our businesses that enthusiasm, or at least that attitude, doesn’t seem to be that lit up”

We think we can improve St. Jude

“I think our track record, which is proven, we know how to integrate it, we know how to manage it, we know how to do well with it, we know how to add value to it, we know what the breadth of offering is, we know the quality of their pipeline and the quality of their people. You don’t just buy it, put it in the portfolio and leave it alone. You buy it and you put the best management you can in place and you run it the best you can. We’ve got really excellent managements in our Medical Device business and I think they’ve got excellent people too. So in spite of the fact that they’ve disappointed investors, I think the investors got to get over last year and look forward here, because I don’t think we bought some challenged property here.”

Analysts are asking about equity issuance to finance the deals

“But I don’t think we’re anywhere close to where we have to make a decision on the equity issuance. At this point we’re planning for it, but we’re only going to do it if it’s in our interest to do it to balance our balance sheet. So full transparency. We’re planning to do it but there is other ways that may well be addressed and we’re nowhere close to a resolution to that. I think that the uncertainty of that for investors just has them cautious, concerns and so on, and I think what I tell most people is, look, by January, this is all going to be pretty clear. ”

Investing in real products, not sentiment

“I’m not investing in sentiment; I’m investing in real products and real company and real business. And I think that what they’re tracking at right now is giving the evidence that what they’ve projected is valid. These businesses, if you look at all the segments of businesses, they’re really doing great.”