Novartis shines with its outlook for 2010 raised
July 15, 2010
Novartis AG Thursday unveiled figures slightly better than expected second quarter 2010 but has attracted attention in revising upward its forecasts for the current year.
Thanks to strong sales of vaccines, the group now expects growth at constant exchange rates, its revenues would fall between the middle and upper range of a single-digit rate (excluding Alcon).
In addition, operating margin and operating margin should increase core group "in the wake of the continued expansion and sustained improvement in productivity," said the laboratory in Basel Thursday in a statement.
However, management did not affect the growth forecast for the pharmaceutical division, which remains at a rate to a figure in the middle of the range.
Novartis also said that currency effects are having a negative influence on the second half if rates remain at their current level.
The group adds that these projections do not account for the acquisition of a 77% stake in Alcon, which he hopes to close the transaction by the end of the year.
The Chief Joseph Jimenez said during a teleconference that the price for the minority shareholders would not overcome and that Novartis was always 100% of Alcon.He also expressed confidence can prevail in case of legal battle.
These forecasts a little more spice to the presentation of second quarter figures, generally above expectations.
"SOLID FIGURES"
The net sales grew 11% to 11.7 billion dollars (9.2 billion euros), while analysts polled by Reuters had expected $ 11.5 billion. In the Pharmaceuticals Division, sales have improved to 7.7 billion, while markets were expecting 7.6 billion.
Net income rose 19% to 2.44 billion, slightly better than the 2.43 billion expected by the markets.Operating income increased by one quarter to 2.96 billion, exceeding forecasts of 2.8 billion.
Earnings per share has grown to $ 1.06 for a consensus which saw 1.05.
For the six months, Novartis recorded a turnover of 23.85 billion, up 18%. Net income rose 34% to 5.38 billion and operating 37% to 6.47 billion.
"Again and always reliable figures.Although the upward revision of expectations, although partly anticipated, and the prospect of improved margins will be good news for investors, "explained the team of the bank Wegelin.
"A very good performance when expectations were high," confirms Michael Nawrath at Zurich Cantonal Bank.
Around 7:45 a.m. GMT, Novartis's action is at arm's index for blue chip stocks in Switzerland and climbed 1.3% to 54.45 francs, while the SMI crumbled 0.1%.
Novartis is trading on a multiple of 9.4 times earnings expected in 2011, representing a discount to its rival Roche, but a premium vis-à-vis AstraZeneca and GlaxoSmithKline.
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