(Reuters) - Drugmaker Abbott Laboratories Inc ABT.N reported lower-than-expected quarterly sales and forecast adjusted 2016 earnings below analysts' estimates, expecting a much lower contribution from its Venezuelan operations.
The company’s shares fell as much as 9.5 percent to $36.62 on Thursday, their lowest in nearly two years, erasing more than $5 billion in market value.
Abbott, which makes products ranging from Similac infant formula to Ensure beverages for adults, is focusing on selling its branded generic drugs in emerging markets, having sold its developed-markets generics business to Mylan NV MYL.O in 2014.
Abbott said its 2016 forecast assumes “a significantly lower contribution” from Venezuela as a result of “challenging market conditions” in the country, which accounted for 2 percent of the company’s total net sales in the first nine months of 2015.
The plunging value of Venezuela's currency has deeply hurt profit at U.S. blue-chip companies and prompted some, such as Procter & Gamble Co PG.N, to remove its operations in the South American country from its consolidated financial reports.
Abbott said it expected adjusted earnings of $2.10-$2.20 per share for 2016. Analysts on average were expecting $2.26 per share, according to Thomson Reuters I/B/E/S.
Abbott’s fourth-quarter revenue missed the average analyst estimate for the first time in four quarters, due to a strong dollar. The company received more than a third of its sales from outside the United States in 2015.
“The impact from foreign exchange appears to be a larger headwind than anticipated,” RBC Capital Markets analysts wrote in a note.
The dollar index .DXY, which measures the currency against a basket of six other major currencies, rose 9 percent in 2015, after rising 13 percent in 2014.
Abbott’s shares, which have fallen 10 percent through Wednesday’s close in 2016, were down nearly 9 percent at $36.84 on Thursday.
Biotechnology stocks in general have been hammered this year as political criticism over medicine prices has increased during the U.S. presidential campaign.
The Nasdaq Biotechnology index .NBI was down 22 percent through Wednesday's close and fell a further 2.3 percent on Thursday.
Reporting by Ankur Banerjee in Bengaluru; Editing by Shounak Dasgupta and Robin Paxton
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