Novartis Shares Buoyed by Guidance Hike -- Update
April 24 2019 - 4:06AM
Dow Jones News
By Donato Paolo Mancini
Shares in Novartis AG (NOVN.EB) shot up in early trading
Wednesday, on track to regain lost ground after the Alcon Inc.
(ALC) spin-off earlier this month, after the Swiss drug giant
raised its 2019 core operating income growth guidance on strong
first-quarter sales.
At 0705GMT, Zurich-listed shares rise 2.6% at CHF79.93, after
gaining as much as 2.8%.
Analysts at Citi said in a note that the strong first-quarter
results should serve to reverse the selloff seen after the Alcon
eye-care unit spinoff earlier this month, which was the largest
Swiss stock-market transaction in nearly a decade. As expected,
Novartis shares lost more than 10% following the spinoff.
Jefferies added that the stock is a top-quality EU pharma growth
pick, with interesting launches like Zolgensma and Mayzent
potentially happening soon.
Net profit for the first quarter came in at $1.87 billion, down
from $1.97 billion the year prior. The company's core operating
income grew to $3.25 billion from $2.98 billion the year prior.
Net sales grew to $11.11 billion on-year.
The Swiss drugmaker raised its core operating income growth
guidance for 2019 to high-single digit, and confirmed its sales
guidance for the year at mid-single digit.
"Novartis is off to a strong start in 2019 with the Mayzent
launch, successful Alcon spinoff, and strong operational execution
leading us to revise 2019 profit guidance upwards," Chief Executive
Vasant Narasimhan said.
Under Mr. Narasimhan, who took the top job last year, Novartis
has been aggressively culling parts of its business to focus on
higher-value operations. The company has spent billions of dollars
in dealmaking to effect that shift.
Write to Donato Paolo Mancini at
donatopaolo.mancini@dowjones.com; @donatopmancini
(END) Dow Jones Newswires
April 24, 2019 03:51 ET (07:51 GMT)
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