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Novo Nordisk's (NVO) Q4 Earnings and Sales Beat Estimates
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Novo Nordisk A/S (NVO - Free Report) reported fourth-quarter 2020 earnings of 64 cents per American Depositary Receipt (ADR), which beat the Zacks Consensus Estimate of 59 cents and increased from 55 cents in the year-ago quarter.
Revenues of $5.14 billion decreased 1% in Danish kroner and increased 5% at constant exchange rate (CER). Revenues outpaced the Zacks Consensus Estimate of $4.91 billion. Increased global sales of 5% CER was driven by higher Diabetes and Obesity care sales owing to elevated GLP-1 sales, offset by insulin revenue decline of 3%.
Sales were negatively impacted by fewer patient treatment initiations, unemployment in the United States and COVID-related destocking.
Full-Year Results
For full-year 2020, earnings of $2.70 per ADR missed the Zacks Consensus Estimate of $2.83.
Revenues of $19.04 billion increased 4% in Danish kroner and 7% at CER, missing the Zacks Consensus Estimate of $19.54 billion.
Novo Nordisk’s shares have gained 15.2% in the past year compared with the industry’s growth of 3.1%.
All growth rates mentioned below are on a year-over-year basis.
Quarter in Detail
Novo Nordisk operates in two segments — Diabetes and Obesity Care, and Biopharmaceuticals.
The Diabetes and Obesity Care segment sales grew 8% at CER. In Diabetes Care, fast-acting insulin (Fiasp and NovoRapid) revenues declined 8% at CER and Human insulin revenues were down 18% at CER. Premix insulin (Ryzodeg and NovoMix) revenues rose 7%. Sales of long-acting insulin (Tresiba, Xultophy and Levemir) increased 4%. Ozempic had a strong launch and recorded sales of DKK 6.19 billion for the quarter, up 51% at CER.
Obesity Care (Saxenda) sales were down 3% at CER year over year.
Sales in the Biopharm segment were down 9% year over year to DKK 4.37 billion. Hemophilia sales (NovoSeven and NovoEight) were down 11% to DKK 2.14 billion.
Sales and distribution costs increased 2% in Danish kroner and 9% at CER year over year. The increase was driven by North America Operations, reflecting the launch of Rybelsus and promotional activities related to Ozempic.
Research and development costs increased 2% in Danish kroner and 6% at CER from the year-ago quarter. The costs were driven by increased clinical trial activity and patient recruitment in ongoing cardiovascular outcome studies SOUL and SELECT, partially offset by lower costs following the conclusion of the semaglutide obesity phase IIIa program, STEP.
Administrative costs decreased 3% in Danish kroner but increased 1% at CER from the same period in 2019.
2021 Outlook
Novo Nordisk expects 5-9% sales growth at CER. The guidance reflects persistent sales growth in International operations. The guidance also reflects robust sales performance of GLP-1 diabetes care products, Ozempic and Rybelsus, as well as growth within Obesity Care. The guidance also reflects intensifying competition in both Diabetes care and Biopharm.
We note that Novo Nordisk faces stiff competition from Eli Lilly (LLY - Free Report) and Sanofi (SNY - Free Report) in the global insulin market. The company also faces stiff competition from Eli Lilly and Astra Zeneca (AZN - Free Report) in the global GLP-1 market.
The COVID-19 pandemic led to uncertainty regarding the treatment of patients and societal impacts such as increased unemployment rate in the United States, which, in turn, is negatively impacting healthcare insurance coverage.
Our Take
Novo Nordisk beat both sales and earnings estimates in the fourth quarter. Ozempic is off to a solid start and the launch of Rybelsus looks impressive. However, the impacts of COVID-19 are likely to affect its performance in the upcoming quarters.
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Novo Nordisk's (NVO) Q4 Earnings and Sales Beat Estimates
Novo Nordisk A/S (NVO - Free Report) reported fourth-quarter 2020 earnings of 64 cents per American Depositary Receipt (ADR), which beat the Zacks Consensus Estimate of 59 cents and increased from 55 cents in the year-ago quarter.
Revenues of $5.14 billion decreased 1% in Danish kroner and increased 5% at constant exchange rate (CER). Revenues outpaced the Zacks Consensus Estimate of $4.91 billion. Increased global sales of 5% CER was driven by higher Diabetes and Obesity care sales owing to elevated GLP-1 sales, offset by insulin revenue decline of 3%.
Sales were negatively impacted by fewer patient treatment initiations, unemployment in the United States and COVID-related destocking.
Full-Year Results
For full-year 2020, earnings of $2.70 per ADR missed the Zacks Consensus Estimate of $2.83.
Revenues of $19.04 billion increased 4% in Danish kroner and 7% at CER, missing the Zacks Consensus Estimate of $19.54 billion.
Novo Nordisk’s shares have gained 15.2% in the past year compared with the industry’s growth of 3.1%.
All growth rates mentioned below are on a year-over-year basis.
Quarter in Detail
Novo Nordisk operates in two segments — Diabetes and Obesity Care, and Biopharmaceuticals.
The Diabetes and Obesity Care segment sales grew 8% at CER. In Diabetes Care, fast-acting insulin (Fiasp and NovoRapid) revenues declined 8% at CER and Human insulin revenues were down 18% at CER. Premix insulin (Ryzodeg and NovoMix) revenues rose 7%. Sales of long-acting insulin (Tresiba, Xultophy and Levemir) increased 4%. Ozempic had a strong launch and recorded sales of DKK 6.19 billion for the quarter, up 51% at CER.
Obesity Care (Saxenda) sales were down 3% at CER year over year.
Sales in the Biopharm segment were down 9% year over year to DKK 4.37 billion. Hemophilia sales (NovoSeven and NovoEight) were down 11% to DKK 2.14 billion.
Sales and distribution costs increased 2% in Danish kroner and 9% at CER year over year. The increase was driven by North America Operations, reflecting the launch of Rybelsus and promotional activities related to Ozempic.
Research and development costs increased 2% in Danish kroner and 6% at CER from the year-ago quarter. The costs were driven by increased clinical trial activity and patient recruitment in ongoing cardiovascular outcome studies SOUL and SELECT, partially offset by lower costs following the conclusion of the semaglutide obesity phase IIIa program, STEP.
Administrative costs decreased 3% in Danish kroner but increased 1% at CER from the same period in 2019.
2021 Outlook
Novo Nordisk expects 5-9% sales growth at CER. The guidance reflects persistent sales growth in International operations. The guidance also reflects robust sales performance of GLP-1 diabetes care products, Ozempic and Rybelsus, as well as growth within Obesity Care. The guidance also reflects intensifying competition in both Diabetes care and Biopharm.
We note that Novo Nordisk faces stiff competition from Eli Lilly (LLY - Free Report) and Sanofi (SNY - Free Report) in the global insulin market. The company also faces stiff competition from Eli Lilly and Astra Zeneca (AZN - Free Report) in the global GLP-1 market.
The COVID-19 pandemic led to uncertainty regarding the treatment of patients and societal impacts such as increased unemployment rate in the United States, which, in turn, is negatively impacting healthcare insurance coverage.
Our Take
Novo Nordisk beat both sales and earnings estimates in the fourth quarter. Ozempic is off to a solid start and the launch of Rybelsus looks impressive. However, the impacts of COVID-19 are likely to affect its performance in the upcoming quarters.
Novo Nordisk currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Novo Nordisk AS Price
Novo Nordisk AS price | Novo Nordisk AS Quote
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking. Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
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