Swiss pharmaceutical giant
) reported fourth quarter 2012 earnings per share of 84 cents, up
71% from the year-ago period. Fourth quarter 2012 core earnings
per share came in at $1.27, up 3% from the year-ago period. Core
earnings were in line with the Zacks Consensus Estimate.
Fourth quarter revenues of $14.8 billion were flat year over
year. Revenues surpassed the Zacks Consensus Estimate of $14.3
billion. Foreign exchange negatively impacted fourth quarter
revenues by 2%.
Full year 2012 earnings were $5.25 per share, down 5.75% year
over year. The Zacks Consensus Estimate for 2012 stood at $5.26
per share. Revenues in 2012 declined 3% year over year to $56.7
billion. Revenues for 2012 were marginally above the Zacks
Consensus Estimate of $56.3 billion.
Quarter in Detail
The Pharmaceuticals division recorded sales of $8.3 billion in
the reported quarter, flat year over year. Revenues were
impacted by the Diovan patent expiration and generic competition
for other key products.
Novartis products like Lucentis, Gilenya, Tasigna, Afinitor
and Galvus continued to perform well. Revenues from newly
launched products increased 17% year-over-year to $4.3 billion in
the reported quarter.
In the fourth quarter, Novartis received EU approval for
Bexsero (for MenB vaccine), Votubia (for kidney tumors associated
with tuberous sclerosis) and Exjade (for iron overload in
non-transfusion-dependent thalassemia). Ilaris for gouty
arthritis, Jetrea for the treatment of vitreomacular traction
(VMT) and macular hole and Exelon Patch line extension were
recommended for approval in the EU. Novartis received FDA
approval for Flucelvax for seasonal influenza and Signifor for
The Alcon Division recorded revenues of $2.6 billion in the
fourth quarter, up 6% driven by solid growth in all the three
franchises, namely, Oncology Franchise, Primary Care Franchise
and Speciality Care Franchise.
Sales from the Sandoz division increased 4% to $2.4 billion
mainly driven by Fougera sales. Sales at the Vaccines and
Diagnostics division declined 6% from the year-ago quarter to
$628 million. Sales in the fourth quarter of 2011 benefited from
higher pre-pandemic sales and diagnostics shipments.
Consumer Health sales at Novartis were down 11% from the
prior-year quarter to $961 million. Sales continued to be
affected by absence of shipments at Novartis' Lincoln facility in
Novartis expects 2013 sales to be in line with 2012 at
constant currency. Excluding the impact of generic competition,
sales are expected to increase at least in the mid-single digits
Novartis stated that generic competition could impact sales by
$3.5 billion in 2013. As generic competition in 2014-2015
declines to roughly 2-3% of total revenues, sales growth in 2014
and 2015 is expected to be in the mid-single digits.
In 2013, sales of Pharmaceuticals are expected to decline in
low-single digit primarily due to generic competition. Sales in
Alcon, Sandoz, Vaccines and Diagnostics are expected to increase
in the mid-to-high single-digit range in the year 2013. Sales in
the Consumer Health division are expected to increase in the high
single-digit range in the year 2013.
Novartis carries a Zacks Rank #3 (Hold). Large-cap pharma
companies that currently look better-positioned include
). All three are Zacks Rank #2 (Buy) stocks.
BAYER A G -ADR (BAYRY): Free Stock Analysis
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NOVARTIS AG-ADR (NVS): Free Stock Analysis
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