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How Novartis’s Alcon Performed in 4Q17

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Alcon

Alcon is Novartis’s (NVS) eye care business. Alcon includes surgical products and vision care products, while the ophthalmic pharmaceuticals were transferred to the innovative medicines business during 2016.

The above chart compares revenues for Alcon since 1Q16.

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4Q17 performance

Alcon reported 8% growth in revenues to ~$1.6 billion during 4Q17 as compared to ~$1.4 billion in 4Q16, which includes 6% growth in operating revenues and a 2% positive impact of foreign exchange. The surgical franchise reported 9% growth in operating revenues, while the vision care franchise reported 2% growth in operating revenues in 4Q17.

Geographically, Alcon reported growth in operating revenues across all markets. Foreign exchange also had a favorable impact on revenues across all markets during 4Q17. US sales rose ~3% to $639 million, while the sales from European markets increased by ~11% to $420 million during 4Q17. The Canada and Latin America markets reported 10% growth in sales to ~$122 million during 4Q17. The Asia/Africa/Australasia markets reported 15% growth in sales to ~$377 million during 4Q17.

Surgical sales

The surgical sales reported revenues of ~$982 million during 4Q17, a 9% growth in operating revenues as compared to revenues of $887 million during 4Q16. The growth was driven by the strong sales of cataract consumable products, refractive products, intra-ocular lenses, and vitreoretinal products globally, partially offset by lower sales of cataract equipment.

Vision care

The vision care franchise reported revenues of ~$582 million, a 4% growth in operating revenues as compared to revenues of $557 million during 4Q16. The growth was driven by the strong sales of both contact lenses as well as contact lens care products during 4Q17.

The BLDRS Europe Select Sector ADR ETF (ADRU) holds 20.9% of its total investments in healthcare companies. ADRU holds 6.3% in Novartis (NVS), 2.5% in AstraZeneca (AZN), 2.6% in GlaxoSmithKline (GSK), and 2.7% in Sanofi (SNY).

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