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Novartis warns of currency drag on 2015 earnings
Swiss drugmaker Novartis (Swiss Exchange: NOVN-CH) on Thursday posted declining sales in the first quarter and cautioned that dollar strength may be a bigger-than-expected drag on full-year figures.
The Basel-based firm said the strong dollar (Exchange: USD=) -- its reporting currency -- would shave 10 percent off 2015 sales and 13 percent from core operating income if April exchange rates continue for the rest of the year.
In January the company forecast the 2015 currency hit would be 7 percentage points on net sales and 12 percentage points on core operating income from continuing operations.
Novartis maintained its 2015 guidance of mid-single-digit sales growth in 2015 and high-single-digit growth in core operating income after stripping out the impact of currency fluctuations.
The group reported a 7 percent year-on-year fall in first-quarter net sales in continuing operations to $11.9 billion, while sales rose 3 percent at constant currencies. Total group net sales were $12.5 billion.
Novartis generated net income from continuing operations of $3.2 billion, down 4 percent in dollar terms on the same period last year but up 8 percent at constant currencies. Total group net income was $3.1 billion.
Analysts in a Reuters poll had forecast total group net sales of $12.6 billion and group core net income of $2.9 billion.
Cross-town rival Roche (Swiss Exchange: ROG-CH) on Wednesday beat expectations for the first quarter with a 3 percent rise in sales on a strong showing from its cancer drugs and a recently launched treatment for a deadly lung disorder.
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