Novartis Meets on the Top Line, Misses Where It Counts

Seth Jayson, The Motley Fool
Updated

Novartis (NYS: NVS) reported earnings on April 24. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), Novartis met expectations on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue dropped slightly and GAAP earnings per share contracted significantly.


Margins shrank across the board.

Revenue details
Novartis logged revenue of $13.74 billion. The 13 analysts polled by S&P Capital IQ foresaw sales of $13.91 billion on the same basis. GAAP reported sales were 2.2% lower than the prior-year quarter's $14.22 billion.

anImage
anImage

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Non-GAAP EPS came in at $1.27. The 10 earnings estimates compiled by S&P Capital IQ predicted $1.29 per share on the same basis. GAAP EPS of $0.95 for Q1 were 20% lower than the prior-year quarter's $1.19 per share.

anImage
anImage

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 67.8%, 90 basis points worse than the prior-year quarter. Operating margin was 20.2%, 380 basis points worse than the prior-year quarter. Net margin was 16.6%, 290 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $14.53 billion. On the bottom line, the average EPS estimate is $1.37.

Next year's average estimate for revenue is $58.60 billion. The average EPS estimate is $5.44.

Investor sentiment
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Novartis is outperform, with an average price target of $64.65.

Can your retirement portfolio provide you with enough income to last? You'll need more than Novartis. Learn about crafting a smarter retirement plan in "The Shocking Can't-Miss Truth About Your Retirement." Click here for instant access to this free report.

At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Advertisement