Thursday April 23, 11:53 AM
Novartis profits slide 14% in first quarter
BASEL, Switzerland (AFP) - Swiss pharmaceutical giant Novartis (Virt-X: NOVN.VX - news) on Thursday posted a 14-percent slump in first quarter net profit, hurt by unfavourable currency movements and a major acquisition.
The group's net profit fell to 1.975 billion dollars (1.5 billion euros) as the 40-billion dollar takeover of the world's biggest eye care company, Alcon (NYSE: ACL - news) , sapped its liquidity and increased its financing costs.
Sales also slipped two percent to 9.7 billion dollars, although it was up 8.0 percent in local currencies, underlining the impact of foreign exchange rates.
Daniel Vasella, the group's chairman and chief executive saw however an "opportunity" in the turmoil.
"The uncertain economy and currency market volatility create an opportunity to continue to enhance productivity and manage costs," he said.
The group said it expected sales to grow at about 5.0 percent, although it warned that unfavourable exchange rates could cut any underlying improvements for the year.
Analysts, who had expected profits of about 1.85 billion dollars, hailed the forecast-beating income, with Bank Helvea recommending investors to buy the stock.
At 1000GMT, the heavyweight stock was up 3.17 percent at 42.92 francs, lending support to the Swiss Market Index, which is up 0.21 percent.
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