Novartis Posts Higher Q1 Earnings, Sales On Strong Sandoz, Entresto; Backs 2022 Outlook

  • Novartis AG NVS has reported a core EPS of $1.46 in Q1 FY22 compared to $1.38 a year ago, beating the consensus of $1.44.
  • Net income reached $2.2 billion, an increase of 8% or 15% at constant currency rates, mainly driven by higher operating income, partly offset by the loss of Roche Holding RHHBY income.
  • Operating income was $2.85 billion, an increase of 18% from the prior year, mainly due to higher sales, increased productivity, and lower impairments, partly offset by higher R&D and M&S investments.
  • Net sales were $12.53 billion, increasing 1% or 5% at constant currency rates from the prior year, missing the consensus of $12.73 billion.
  • The increase was driven by volume growth of 11 percentage points, price erosion of 3 percentage points, and the negative impact of the generic competition of 3 percentage points.
  • Revenue from Entresto jumped 42% to $1.1 billion.
  • Core operating income at Sandoz returned to growth in the quarter with a gain of 21% to $538 million on a rebound in cold remedies.
  • Guidance: Looking ahead to FY22, Novartis still expects core operating income to grow mid-single digit. Sales are still expected to grow mid-single digit.
  • Price Action: NVS shares are up 0.51% at $90.90 during the premarket session on the last check Tuesday.
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