Novartis Q3 Profit Declines; Lifts FY26 Core Income View, Backs Sales Outlook

(RTTNews) - Swiss drug major Novartis AG (NVS, NOVN.SW) reported Tuesday sharply lower profit in its third quarter, mainly hurt by an impairment charge and higher expenses, despite growth in net sales.

Further, the firm raised fiscal 2026 outlook for core operating income and confirmed sales growth view.

Vas Narasimhan, CEO of Novartis, said, "Novartis delivered solid sales growth in Q3, as priority brands and launches more than offset generic erosion, demonstrating the replacement power of the business. Combined with productivity efforts, this drove strong bottom line performance and allowed us to upgrade our full-year guidance.... With continued momentum across the business and pipeline, we remain well on track to deliver our mid- and long-term outlook."

Looking ahead for fiscal 2026, the company now expects core operating income to be in line to grow low single-digit, compared to previous outlook of a decline in low single-digit.

The firm continues to expect annual net sales to grow low single-digit.

In the third quarter, net income plunged 70 percent to $1.196 billion from last year's $3.930 billion. Earnings per share were $0.63, down 69 percent from $2.04 a year ago.

The latest results were hurt by higher R&D expenses, including a $1.9 billion partial impairment charge of the del-desiran IPR&D asset in the operating income level, and higher other expense, partly offset by higher net sales.

Core net income was $4.655 billion, compared to $4.330 billion last year. Core earnings per share were $2.46, compared to $2.25 a year ago.

Operating income fell 59 percent from last year to $1.843 billion mainly due to a partial impairment of the del-desiran asset, while core operating income grew 11 percent to $6.036 billion.

Core operating income margin was 41.6 percent, increasing 2.3 percentage points from last year.

Net sales grew 4 percent on a reported and constant currency basis to $14.522 billion from $13.909 billion last year.

Sales growth was mainly driven by priority brands including Kisqali, Kesimpta, Scemblix, Leqvio and Cosentyx.

In the overnight activity on the NYSE, the shares were gaining around 0.49 percent, trading at $154.57, extending the 1.78 percent increase at Monday's regular closing.

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