Novartis Stock Gains On Core Operting Income, Volume Growth In Q2; Backs Outlook

(RTTNews) - Shares of Novartis AG were gaining around 3 percent in Swiss trading and around 5 percent in pre-market activity on the NYSE on Tuesday, after the Swiss pharmaceutical major reported higher core operating income in its second quarter with growth in net sales and volume. Quarterly net profit, meanwhile, declined from last year, and the firm maintained fiscal 2026 outlook.

Vas Narasimhan, CEO of Novartis, said, "Novartis delivered a solid second quarter, returning to sales growth driven by continued momentum from Kisqali, Kesimpta, Scemblix and Pluvicto. We are encouraged by the early trajectory of our recent launches, Rhapsido in CSU and Itvisma. … We are on track for multiple important readouts ahead in the second half, and remain on track to deliver our full-year guidance and mid-term outlook."

For fiscal 2026, the company said it continues to expect fiscal 2026 core operating income to decline low single-digit and net sales to grow low single-digit.

In the second quarter, net income totaled $3.257 billion, down 19 percent from $4.024 billion last year. Earnings per share reached $1.71 for the quarter, 17 percent lower than $2.07 a year ago.

Core net income was $4.578 billion, compared to $4.710 billion last year. Core earnings per share were $2.41, compared to $2.42 in the prior year period.

Operating income dropped 2 percent from last year to $4.75 billion mainly due to lower gross profit, partly offset by lower SG&A expenses. However, core operating income edged up to $5.940 billion from $5.925 billion a year earlier. Core operating income margin stood at 41.2 percent, down 1.0 percentage point from last year.

Net sales reached $14.408 billion in the second quarter, a growth of 3 percent from $14.054 billion a year ago. Sales growth was 1 percent at constant currency.

The company noted that volume growth contributed 18 percentage points to sales, while generic competition offset 14 percentage points. Pricing had a negative impact of 3 percentage points, though currency provided a positive impact of 2 percentage points.

Sales growth was driven by priority brands, with Kisqali increasing 43 percent at constant currency, Kesimpta rising 32 percent, Scemblix climbing 89 percent, Pluvicto advancing 43 percent, and Leqvio growing 59 percent at constant currency.

In pre-market activity, NVS shares were trading at $154.99, up 3.67 percent, after closing Monday's regular trading 2.73 percent lower.

In Switzerland, the shares were trading at 126.54 Swiss francs, up 2.79 percent.

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