Pharmaceutical firm Novartis saw its second quarter earnings fall by 7 per cent as the strength of the US dollar hit sales.
The company said its core operating income in US dollar terms fell to $3.59 billion (€3.31 billion), in line with the $3.58 billion average of 11 estimates compiled by Bloomberg.
Novartis lowered the forecast for its Alcon eye-care unit, and raised the guidance for its Sandoz generics business.
Currency fluctuations stripped 0.9 percentage points from the profit margin, undermining chief executive Joe Jimenez’s efforts to increase profitability after wrapping up a $30 billion reshaping of the company. Novartis in March completed offloading its slow-growing animal health business and acquired GlaxoSmithKline’s portfolio of cancer drugs.
“Overall not a great performance this quarter,” Michael Leuchten, an analyst at Barclays, wrote in a note to clients. The second-quarter results were “more messy than usual” with gains in the generics unit being insufficient to compensate for weakness in Alcon, he said.
Novartis reiterated its full-year forecast for core operating income to grow by a high-single digit percentage and sales to expand at a mid-single digit rate, excluding currency fluctuations.
Shares of Novartis have gained 32 per cent in the past 12 months, compared with a 14 percent advance for Switzerland’s benchmark SMI Index.
Net sales in the company’s pharmaceutical division fell 4 per cent to $7.8 billion in US dollar terms, and rose 6 per cent when excluding currency fluctuations.
Bloomberg
