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Earnings

Novartis boosts third-quarter profit, pushes Alcon decision to 2019

Key Points
  • Novartis's third-quarter core net income rose 4 percent at constant currencies, beating expectations
  • The drugmaker said it had made "significant progress" in preparing its Alcon eyecare unit for a possible spinoff by the first half of 2019
  • The Swiss group confirmed its full-year outlook
VIDEO3:0203:02
Novartis CEO: Alcon spin-off must be from a position of strength

Novartis's third-quarter core net income rose 4 percent at constant currencies, beating expectations, as the drugmaker said it had made "significant progress" in preparing its Alcon eyecare unit for a possible spinoff by the first half of 2019.

Core net income rose to $3.02 billion, compared to the average analyst estimate of $2.93 billion in a Reuters poll. Sales rose 2 percent to $12.4 billion, compared to the $12.2 billion Reuters poll average.

The Swiss group confirmed its full-year outlook.

On Alcon, where sales rose 7 percent in constant currencies, Novartis said on Tuesday a final decision on the unit's future hinged on continued sales growth and margin improvement over multiple quarters, making potential action "not likely before the first half of 2019".

Fabrice Coffrini | AFP | Getty Images

"The strategic review also indicates that creating a stand-alone company via a capital markets exit could create additional shareholder value," Novartis said in a statement.

"We have also made significant progress on developing a potential capital markets solution, including financial carve-outs, tax and legal entity structuring, and identifying listing and incorporation locations."

Psoriasis drug Cosentyx generated quarterly sales of $556 million, beating market estimates. Sales of heart drug Entresto more than doubled to $128 million but missed market expectations.