Novartis (NYSE:NVS) has become a better diversified company with acquisitions of vaccines specialist Chiron and 25% of eye-care specialist Alcon (NYSE:ACL) as well as taking on Teva Pharmaceuticals (NASDAQ:TEVA) in the generic-drug world with its Sandoz group.

The diversification will help the company deal with drug-patent expirations better than purer pharmaceutical companies like Pfizer (NYSE:PFE) and Merck (NYSE:MRK), but the diversification is far from a cure all as the fourth quarter showed.

Sales were up 8% in local currencies, but were dragged down to just 1% because of the strengthening dollar. Pharmaceuticals, which is still by far Novartis' largest division, grew 5%. Vaccines and diagnostics grew 23% in the quarter, but it makes up less than 5% of revenue.

And that's where the good news ends. Sales of generic drugs at Sandoz fell 8%, as U.S. sales were hampered by problems at one of its plants. Sandoz has a fairly well-stocked pipeline with 20 first to file paragraph IV abbreviated new drug applications, which come with six months of exclusive sales, so the long-term growth should be there. Consumer health revenue was also down for the quarter. While pharmaceutical drugs might be necessary, consumers are apparently able to cut back on over-the-counter products when things are tight.

With the economy still in the tank, growth next year doesn't look much better. The company is guiding for sales growth around 5% in constant currencies -- pharmaceuticals are expected to lead with a slightly higher growth rate. But if the dollar continues to strengthen, Novartis would be facing a lot of headwind and it'd be lucky to see year-over-year growth in dollars.

The good news is that the company is cutting costs, so earnings growth should be greater than revenue growth and the company is proposing to up its dividend by 25%, its 12th consecutive annual increase, so investors are getting paid to wait for sales to pick back up.