Novartis sees net profit jump 24 percent
By Nina Larson, AFP
April 25, 2014, 12:00 am TWN
GENEVA--Swiss pharmaceuticals giant Novartis on Thursday posted a 24-percent jump in first-quarter net profit, driven largely by the sale of a blood transfusion diagnostics unit.
The company, which earlier this week announced an extreme make-over of its structure, said it had raked in a net profit of US$2.96 billion (2.14 billion euros) during the first three months of the year.
Not counting acquisitions or other exceptional events such as the US$900 million it booked during the quarter on the sale of its blood transfusion diagnostics unit to the Spanish firm Grifols, Novartis said its net profit remained flat year-on-year at US$3.12 billion.
That was slightly higher than what was expected by analysts, according to a poll by Dow Jones Newswires.
The company meanwhile saw its net sales edge up just 1.0 percent during the quarter to US$14.02 billion, missing analyst expectations it would rake in US$14.22 billion.
Largely thanks to the diagnostics unit sale, announced last November, Novartis meanwhile saw its operating profit for the quarter soar 22 percent to US$3.5 billion.
Investors appeared disappointed, sending Novartis's share price down 1.11 percent to 75.40 Swiss francs a piece in midday trading as the Swiss stock exchange's main SMI index inched up 0.02 percent.
Novartis chief executive Joe Jimenez was upbeat though.
"Novartis delivered a solid quarter, with all divisions contributing to growth," he said in the earnings statement, adding that going forward, things should only get better.
"The transformational deals announced on Tuesday position the company for future success based on our sharpened focus, innovation power and financial strength," he said.
He was referring to the unveiling of several multibillion-dollar deals with British GlaxoSmithKline and U.S. group Eli Lilly promising a major shake-up of the pharmaceutical sector.
The string of takeovers and ventures by the three giant health-care giants will see Novartis sharpen its focus on the high-grossing cancer sector, GSK boost its share in vaccines and Eli Lilly strengthen its animal health unit.
In the biggest of the deals announced Tuesday, Novartis said it would buy GSK's cancer treatment business for US$16 billion in cash, including US$1.5 billion that would depend on future performance.
In exchange, the Swiss group plans to sell its vaccines division, excluding flu vaccines, to the British company for up to US$7.1 billion, also in cash.
The two groups also plan to create a joint consumer health-care business, expected to book around US$10 billion in annual sales.