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Novartis’s 4Q17 Earnings: Segment-Wise Revenues

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Novartis’s revenues

Novartis (NVS) reported revenues of ~$12.9 billion in 4Q17, representing 5.0% growth in revenues compared to ~$12.3 billion in 4Q16. For fiscal 2017, Novartis reported revenues of ~$49.1 billion, reflecting 1.0% growth in revenues compared to ~$48.5 billion in 2016.

The chart below compares the company’s segment-wise revenues since 1Q16.

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Segment-wise revenues

Novartis (NVS) classifies its business into three segments:

  • Innovative Medicines: including the Prescription Medicines business
  • Sandoz: the Generic Pharmaceuticals business
  • Alcon: the Eye Care business

The company’s Innovative Medicines segment includes products from two business units: Novartis Pharmaceuticals and Novartis Oncology. The Innovative Medicines segment reported 6.0% growth in revenues to ~$8.8 billion in 4Q17 compared to ~$8.3 billion in 4Q16.

These revenues were driven by 9.0% growth in volumes. The generic competition had a 4.0% negative impact on its growth due to lower sales of Gleevec/Glivec in the US and European markets.

Sandoz, the Generic Pharmaceuticals business of Novartis, reported nearly flat revenues at $2.6 billion in 4Q17 compared to 4Q16. This includes a 4.0% decline in operating revenues, offset by a 4.0% positive impact of foreign exchange.

Alcon, the Eye Care division, reported 8.0% growth in revenues to ~$1.6 billion in 4Q17, compared to revenues of ~$1.4 billion in 4Q16. This includes ~6.0% growth in operating revenues and a 2.0% positive impact of foreign exchange.

The BLDRS Europe Select ADR ETF (ADRU) holds 21.2% of its total investments in healthcare companies. ADRU holds 6.6% in Novartis AG ADR (NVS), 2.8% in Novo Nordisk ADR (NVO), 2.5% in GlaxoSmithKline ADR (GSK), and 2.4% in AstraZeneca Plc ADR (AZN).

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