Novartis Q4 Profit, Sales Down, Core EPS Tops View; Lifts Dividend; Sees Growth In FY23

Swiss drug major Novartis AG (NVS) reported Wednesday that its fourth-quarter net income declined 91 percent to $1.47 billion from last year's $16.31 billion. Earnings per share were $0.69, down from $7.29 a year ago.

The profit drop reflects the absence of prior year's Roche income of $14.6 billion. Excluding the impact of Roche income, net income grew 2 percent at constant currencies.

Core net income was $3.25 billion or $1.52 per share, compared to $3.14 billion or $1.40 per share last year.

On average, five analysts polled by Thomson Reuters expected earnings of $1.44 per share for the quarter. Analysts' estimates typically exclude special items.

Core operating income increased 6 percent to $4.03 billion from prior year's $3.82 billion.

Net sales were $12.69 billion, down 4 percent from last year's $13.23 billion. Sales grew 3 percent in constant currencies. Analysts expected sales of $13.13 billion for the quarter.

The sales reflected volume growth of 10 percentage points, as well as price erosion and the negative impact from generic competition.

Further, Novartis Board of Directors proposed a dividend payment of 3.20 Swiss francs per share for 2022, up 3.2 percent from the prior year. Shareholders will vote on this proposal at the Annual General Meeting on March 7.

Looking ahead for fiscal 2023, the company expects sales to grow in low-to-mid single digit and core operating income in mid single digit, assuing Sandoz would remain within the Group for the entire year.

Excluding Sandoz, the company's sales would grow low-to-mid single digit and core operating income would grow mid-to-high single digit.

Regarding the planned Sandoz spin-off, Novartis said the plan remains on track for second half. Completion of the transaction is subject to certain conditions. The transaction is expected to be tax neutral to Novartis.

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