(RTTNews) - Swiss drug major Novartis AG (NVS) reported Tuesday that its second-quarter net income declined 4 percent to $1.87 billion from last year's $2.11 billion, mainly due to higher impairments.
Earnings per share were $0.82, down 10 percent from $0.91 a year ago.
Core net income was $3.11 billion or $1.36 per share, compared to prior year's $3.10 billion or $1.34 per share.
Operating income declined 12 percent from last year to $2.35 billion, while core operating income grew 1 percent on a reported basis and 6 percent at constant currency rates to $3.67 billion.
Core operating income growth reflected lower spending and improved gross margin, driven by productivity and product mix, partly offset by lower sales
Net sales declined 4 percent to $11.35 billion from last year's $11.76 billion. On a constant currency rate, sales dropped 1 percent. The results reflected largely reversing forward purchasing from the first quarter.
The company said its key products continued growth, despite COVID-19. Volume contributed 5 percentage points to sales growth driven by Entresto, Zolgensma and Cosentyx, partly offset by the impacts of COVID-19.
Volume growth was offset by price erosion of 3 percentage points and negative impact from generic competition of 3 percentage points.
Looking ahead for fiscal 2020, the company tightened its guidance within prior guidance ranges. The company expects net sales to grow mid single digit and core operating income to grow low double digit.
The company now sees higher end for core operating income and lower end for sales.
Vas Narasimhan, CEO of Novartis, said, "We are on track to deliver on our commitment to drive consistent margin expansion and are excited by the progress of our deep mid to late stage pipeline to drive long-term growth."
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