Novartis stock inched higher Tuesday on a mixed quarterly earnings report and after the company reiterated its full-year outlook — with one notable exception.
The company boosted its outlook for Sandoz, its generic drugs arm. Now, Novartis expects Sandoz sales to grow by a low to mid-single-digit percentage, up from its prior low-single-digit guidance. But Novartis is soon to spin off its Sandoz division. As a result, the stand-alone Novartis will be a "pure-play innovative medicines business," the company said in a news release.
Six key medicines Novartis counts in its innovative medicines division grew a collective 23% in its most recent quarter. Those drugs represent a third of the total business, Chief Executive Vas Narasimhan said.
"We are confident in delivering growth and margin expansion through our new focused 'pure-play' innovative medicines strategy, underpinned by our five core (therapeutic areas), technology platforms, priority geographies and a deep, value-oriented pipeline," he said in a written statement.
On today's stock market, Novartis stock advanced 1% to close at 78.51.
Novartis Stock: Focusing On Innovative Meds
During the third quarter, core Novartis earnings sank 8% on a strict, as-reported basis to $1.58 per share. But earnings topped forecasts by 3 cents. In constant currency, earnings inched up 1%.
Sales fell 4% to $12.54 billion and were below expectations for $12.88 billion. Excluding the impact of exchange rates, sales advanced 4%.
Overall, the innovative medicines business grew 4% in constant currency to $10.3 billion, with Sandoz sales up 4% to $2.2 billion. On a strict, as-reported basis, sales sank a respective 3% and 7%.
While Novartis boosted its Sandoz outlook, the company kept its guidance for the full year. It expects mid-single-digit sales growth. Novartis stock analysts forecast $6.02 in per-share earnings and $51.96 billion in sales.
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