Novartis Shares Drop as Q4 Earnings and Sales Miss Expectations

Novartis, the Swiss pharmaceutical giant, experienced a decline in its shares following the release of its fourth-quarter earnings report. Both earnings and sales fell short of consensus expectations, leading to disappointment among analysts.

As of 0819 GMT on Wednesday, Novartis shares were down by 4.7% at CHF88.27. However, despite this drop, the shares have still managed to stay up by 4% since the start of the year.

Novartis reported a core operating profit of $3.82 billion for the quarter. This figure represents a 4.8% increase compared to the same period the previous year. Additionally, sales for the quarter rose by 8% to $11.42 billion.

Unfortunately, analysts polled by Visible Alpha had predicted higher figures for both sales and core operating profit. They estimated quarterly sales to be at $11.51 billion and core operating profit to reach $4.08 billion.

Looking ahead, Novartis provided guidance for the year, projecting growth in the mid-single-digit percentage range for sales and high-single-digit for core operating income. It is important to note that these projections exclude currency movements.

Analysts at Jefferies have analyzed Novartis's 2024 guidance and predict sales between $46.7 billion and $48.0 billion, with a core operating profit ranging from $17.0 billion to $17.5 billion.

According to estimates compiled by Visible Alpha, the current consensus expectations are slightly lower than Jefferies' predictions, with sales estimated at $47.69 billion and core operating profit at $18.0 billion.

In conclusion, Novartis's fourth-quarter earnings report has disappointed analysts, resulting in a decline in their shares. The company's projections for future sales and core operating profit have also fallen slightly below expectations.