Novartis reported higher profit in its second quarter, despite weak net sales.
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A volume growth of six percentage points was offset by the negative impacts of generic competition and pricing. Further, the company confirmed its forecast for fiscal 2017.
For the second quarter, net income grew 10% to $1.98 billion from $1.81 billion a year ago, mainly driven by divestment gains and lower amortisation. Earnings per share increased 11% to $0.84 from $0.76 last year.
Core net income was $2.87 billion or $1.22 per share, compared to prior year's $2.93 billion or $1.23 per share last year.
For the quarter, operating income on a reported basis increased 9% year-over-year to $2.28 billion, while core operating income fell 3% to $3.24 billion.
At constant currency rates, core operating income was in line with prior year as gross margin expansion and productivity offset the generic erosion and growth investments.
Net sales were $12.24 billion, 2% lower than last year's $12.47 billion. At constant rates, net sales remained flat as growth drivers offset Gleevec/Glivec Gx impact.
Innovative Medicines net sales were $8.3 billion, down 1%, despite volume growth of seven percentage points. Among key growth drivers, Cosentyx sales climbed 90% at constant currency, with strong growth in all three indications. Entresto grew 240% in constant currency rates, driven by improved access and US sales force expansion.
Excluding Gleevec/Glivec, Oncology grew 9% driven by Promacta, Tafinlar + Mekinist and Jakavi.
Net sales in Emerging Growth Markets grew 4% driven by strong performance in China, Russia and Brazil.
Sandoz net sales fell 5%, as volume growth of 4 percentage points was more than offset by 8 percentage points of price erosion, mainly in the US.
Alcon sales grew 1% driven by Surgical with growth in key segments, including IOLs, and Vision Care.
Looking ahead, for fiscal 2017, the company continues to expect net sales to be broadly in line with prior year, and core operating income to be broadly in line or decline low single digit, both at constant currency rates. ■