Alcon’s parent, Novartis, cites momentum in 3 percent profit rise
07/17/2014 11:04 AM
07/17/2014 11:06 AM
GENEVA Novartis, the Swiss pharmaceutical company that owns Fort Worth-based Alcon, posted a 3 percent rise in second-quarter profits today, reflecting what it described as solid growth and an increased focus on core products.
Profits during the April-June quarter rose to $3.28 billion, or $1.34 a share, up from $3.18 billion in the same quarter of 2013, helped by “strong innovation momentum” and rising sales in some of its household brands, the Basel-based company reported.
Operating income at Alcon was $471 million, up 19 percent from the prior year when the company logged costs from integrating its eye-care businesses. Net sales increased by 3 percent to $2.8 billion, led by growth in pharmaceuticals and surgical equipment, including the launch of new systems for cataract surgery.
The company’s vision care business grew by 2 percent as solid contact lenses showed growth while lens care products declined due to market shifts to disposable lenses.
The earnings fell short of the $1.37-a-share share average forecast from 11 analysts compiled by Bloomberg News, and the company’s shares (ticker: NVS) traded down $1.22 to $88.85 a share in morning trading in New York.
Earlier this year, Novartis launched a major overhaul of its business with a series of multibillion-dollar deals with GlaxoSmithKline and Eli Lilly, a reflection of the restructuring that’s occurring in the fast-changing industry.
Novartis confirmed its outlook for 2014 is for mid-to-high single-digit sales growth, partly due to its confidence from progress and approvals for cancer and heart drugs that are in development.
Investors are interested in results to be presented in August from a trial of a heart failure drug that could be Novartis’s biggest medicine than in today’s numbers, said Michael Leuchten, an analyst at Barclays Plc in London.
“When all’s said and done they’re going to get away with having a slightly weak set of numbers because the focus is slightly different,” Leuchten said today.
Earlier this week, Novartis announced a partnership between Alcon and Google to develop smart contact lenses with embedded electronics to improve vision and monitor insulin levels in diabetics. Alcon employs about 4,500 workers at its south-side complex in Fort Worth,
CEO Joseph Jimenez told reporters the company delivered a solid quarter and is benefiting from “a sweeping transformation” of its commercial portfolio.
Novartis said Thursday its deal to buy GSK’s cancer-drug business for $14.5 billion, plus up to $1.5 billion more if certain milestones are met, is now expected to close in the first half of 2015. The Swiss company has agreed to sell most of its vaccines business to GSK for $7.1 billion, plus royalties, giving GSK better market position with Bexsero, a meningitis B vaccine. The two firms are also creating a new consumer health care business.
This article includes material from The Associated Press, Bloomberg News and Star-Telegram staff.
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