Novartis reports 7% rise in 1st-qtr net income, beating expectations

Swiss drug giant Novartis (NOVN: VX) this morning reported first-quarter 2013 financial results showing group net sales increased 2% (+4% constant currency) to $14.0 billion, with all divisions contributing to growth. Currency had a negative impact of 2 percentage points.

Group operating income increased 6% (+10% cc) to $2.9 billion. Operating income margin increased by 0.8 percentage points to 20.7% of net sales. Core operating income was up 3% (+6% cc) to $3.7 billion. Core operating income margin in constant currencies increased by 0.6 percentage points, partly offset by a negative currency impact of 0.4 percentage points, to 26.5% of net sales. Excluding the impact of generic competition, core operating income grew by 16% (cc). The adjustments made to Group operating income to arrive at core operating income amounted to $818 million (2012: $871 million). Group net income was $2.4 billion (+7%, +13% cc). Earnings per share were up 5% (+12% cc) to $0.98. Group core net income increased 7% (+10% cc) to $3.25 billion, beating estimates of $3.12 billion from seven analysts polled by Bloomberg. Core EPS increased 6% (+9% cc) to $1.32.

Commenting on the results, Joseph Jimenez, chief executive of Novartis, said: "Novartis delivered a solid quarter, with all divisions contributing to growth. Significant expansion in our growth products helped to offset the impact of patent expirations. Vaccines and Diagnostics performance improved, and achieved a key approval for Bexsero [multicomponent meningococcal serogroup B vaccine] in the EU while Consumer Health returned to sales growth. Our focus on innovation continued to pay off, with eight approvals in the EU and US, and an FDA Breakthrough Therapy designation for LDK378 in lung cancer. I am pleased with our solid start to the year."