Abbott CEO losing no sleep over stronger dollar
By Ransdell Pierson (Reuters) - Abbott Laboratories' chief executive officer is not worried about the stronger dollar, telling analysts on Thursday his company will better withstand its painful effects than rivals due to its European factories and growing sales of nutritional products, medical diagnostics and medical optics. "We are just not vulnerable to the euro and a lot of companies are," Miles White told analysts on a conference call. White said the stronger dollar will crimp company sales by 6 percent this year, far worse than the 2.5 percent drag on Abbott sales seen in 2014. But the potential foreign exchange hit is limited, Abbott said, because many of Abbott's factories are located in Europe, where they incur costs in euros. Moreover, the European factories ship diagnostics and other medical devices, generic drugs, infant and adult nutritional products and other products around the world, limiting exposure to the dollar. Abbott, which captures 70 percent of its revenue from outside the United States, on Thursday said its global sales rose 5.6 percent in the fourth quarter. But it said sales would have risen 10.2 percent if not for the stronger dollar, which lowered the value of sales in many other countries whose currencies have weakened versus the dollar. Abbott has annual sales of more than $20 billion. Half of its sales are in emerging markets, like China and India, while 30 percent are from the United States and another 20 percent is from other developed countries, including Europe and Canada. Rival U.S. healthcare companies Johnson & Johnson, Pfizer Inc and Bristol-Myers Squibb Co in the past week issued 2015 earnings forecasts below Wall Street expectations, citing the stronger dollar. But Abbott's 2015 earnings outlook of $2.10 to $2.20 per share from continuing operations was in line with expectations, and would reflect growth of 8.5 percent from last year. While other companies lowered their 2015 forecasts due to currency factors, White said Abbott refused "to reset the bar lower," and might well end up topping its 2015 profit forecast. "We are entering 2015 with good momentum," White told analysts. "The fundamentals of our business are strong and ongoing trends across our markets remain positive." The suburban Chicago company, whose profit margins rose by two percentage points last year, said they are expected to expand by another percentage point in 2015, on cost cuts and stronger sales of its array of products. Abbott shares rose 3.3 percent on Thursday to $44.84, outpacing a 0.7 percent gain for the ARCA Pharmaceutical Index of large U.S. and European drugmakers. (Reporting by Ransdell Pierson; Editing by Bernard Orr)
