Novartis Partners' Profits Rise Below Forecasts

Swiss analysts expected to see a rise in net profits for the first six months of 1996 from Ciba-Geigy in the 10%-13% range and from Sandoz in the 14% to 20% range, according to a Reuters report. What they got was an increase in first-half net profits at Ciba of 6% to 1.6 billion Swiss francs ($1.3 billion), and a 12% rise from Sandoz to 1.2 billion francs.

Sandoz said that the 12% growth in net income was a result of improved operating income margins and a marked reduction in net financial expenditure. The reduction was achieved by virtue of the proceeds from the sale of the chemicals division, Clariant, and the high free cash flow generated, said the firm. Operating income for the first six months of 1996 amounted to 1.6 billion francs, up 1.5%.

Sandoz, which posted sales growth of 7% in July (Marketletter July 15), suggested that allowing for merger-related special items, "the full year is likely to be comparable to the development of the first half."