Novartis in 2Q17: Performance of Alcon

Alcon is the eye care business of Novartis (NVS). It’s divided into two subsegments: surgical and vision care. Novartis transferred the ophthalmic pharmaceuticals portfolio to Innovative Medicines in 2Q16.

For 2Q17, Alcon reported a 1.0% growth in revenues to $1.52 billion compared to $1.51 billion in 2Q16. It reported an operational growth of 3.0% in 2Q17 and a 2.0% negative impact of foreign exchange, resulting in overall growth of 1.0%.

Surgical sales reported a 3.0% growth at constant exchange rates in 2Q17. It was driven by the strong performance of cataract consumables, vitreoretinal lenses, and intraocular lenses across all the major markets.

Vision care reported a 2.0% growth in revenues at constant exchange rates in 2Q17. It was driven by double-digit growth in Dailies Total1 and a strong performance for the daily contact lens portfolio.

Geographically, the segment reported operational growth in Asia, emerging markets, and Japan, while operating revenues were flat in Europe, the Middle East, and Africa. However, the North American region reported a fall in operating revenues for 2Q17 due to lower sales of weekly and monthly contact lens products.

To divest the risk, you can consider the Schwab International Equity ETF (SCHF), which holds ~0.50% of its total assets in Novartis. SCHF also holds 0.70% in GlaxoSmithKline (GSK), 0.60% in AstraZeneca (AZN), and 0.40% in Teva Pharmaceutical Industries (TEVA).