Novartis Q4 Core EPS Beats Market, Hikes Dividend; Sees Growth In FY25; Stock Up

(RTTNews) - Swiss drug-major Novartis AG reported Friday weak net earnings in its fourth quarter on the absence of prior year's significant gain related to Sandoz Group AG spin-off. However, earnings from continuing operations grew from last year, and core earnings beat market estimates along with top line. Further, the company issued positive outlook for fiscal 2025 and lifted its dividend. Following the news, the shares were gaining more than 4 percent in the mid-day trading on the Switzerland market, as well as around 2 percent in pre-market activity on the NYSE.

Vas Narasimhan, CEO of Novartis, said, "With the momentum we are seeing in the business, we expect to continue our strong sales growth with margin expansion in 2025 and we remain on track to deliver on our mid-term guidance. Looking ahead, we are focused on executing against our pipeline, including 15 submission-enabling readouts over the coming years and more than 30 assets with the potential to drive differentiated growth over the long term."

For fiscal 2025, the company projects net sales to grow mid- to high-single digit and core operating income to grow high single to low double-digit.

In fiscal 2024, net sales were $50.3 billion and core operating income was $19.5 billion.

Further, the Novartis Board of Directors proposed a dividend payment of CHF 3.50 per share for 2024, up 6.1 percent from the prior year. Shareholders will vote on this proposal at the AGM on March 7.

For the fourth quarter, net income plunged to $2.82 billion from last year's $8.48 billion. Earnings per share fell to $1.42 from last year's $4.14.

The prior year's results included net income of $5.84 billion from discontinued operations of Sandoz Group AG following its spin-off.

On a continuing operations basis, net income grew 7 percent to $2.82 billion from last year's $2.64 billion, and earnings per share increased 10 percent to $1.42 from $1.29 last year.

Core net income was $3.93 billion or $1.98 per share, compared to $3.13 billion or $1.53 per share a year earlier.

The Wall Street analysts on average expected the company to report earnings of $1.78 per share. Analysts' estimates typically exclude special items.

Net sales for the quarter grew 15 percent to $13.15 billion from last year's $11.42 billion. Sales grew 16 percent at constant currency rates. The Street was looking for sales of $12.82 billion for the quarter.

Sales growth was driven by continued strong performance from Entresto, Kesimpta, Kisqali, Cosentyx, and Leqvio.

In Switzerland, Novartis shares were trading at 97.58 francs, up 4.03 percent.

In pre-market activity on the NYSE, Novartis shares were gaining around 2.07 percent to trade at $106.92

For more earnings news, earnings calendar, and earnings for stocks, visit rttnews.com.