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Novartis (NVS) Beats Earnings & Sales in Q2

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Novartis (NVS - Free Report) has a strong presence in the healthcare market across the world. This Switzerland based company has a presence in the field of oncology, neuroscience, ophthalmology and generics.

However, like many of its peers, Novartis is facing generic competition and pricing pressure for some of the key products in its pharmaceutical segment. Novartis’ blockbuster drug, Diovan lost exclusivity both in the U.S. and EU and entry of generics is impacting the top-line. The company’s ophthalmologic division, Alcon, was facing challenging conditions due to a decline in surgical equipment sales as well as intensifying generic competition in the country. In a bid to revamp its beleaguered Alcon business, Novartis announced that its ophthalmic pharmaceuticals business will be moved to the pharmaceuticals division.

In this scenario, investor focus remains on late-stage pipeline candidates and their commercial potential, apart from the usual top-and bottom-line numbers. Novartis’ track record has been quite bleak, with the company beating estimates in only one of the last four quarters. Overall, Novartis has posted an average negative earnings surprise of 1.98% for the four trailing quarters. 

Currently, Novartis has a Zacks Rank #3(Hold), but that could definitely change following the company’s earnings report which was just released. We have highlighted some of the key stats from this just-revealed announcement below:

Earnings: Novartis beat on earnings in the second quarter of 2016. Our consensus called for EPS of $1.18, while the company reported EPS of $1.23.

Revenue: Novartis posted revenues of $12.5 billion, beating our consensus estimate of $12.1 billion.

 

NOVARTIS AG-ADR Price and EPS Surprise

NOVARTIS AG-ADR Price and EPS Surprise | NOVARTIS AG-ADR Quote

Key Stats: The strong performance of growth products (Gilenya, Cosentyx among others) offset the impact of generic competition for key drugs (Gleevec).  The generic arm, Sandoz also performed well. However, sales from Alcon continue to disappoint.

Check for our full write up on this Novartis earnings report later!

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