The 10-second takeaway
For the quarter ended June 30 (Q2), Novartis beat slightly on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue increased slightly. Non-GAAP earnings per share shrank. GAAP earnings per share dropped.
Margins dropped across the board.
Novartis logged revenue of $14.49 billion. The 10 analysts polled by S&P Capital IQ expected a top line of $14.31 billion on the same basis. GAAP reported sales were the same as the prior-year quarter's.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $1.30. The five earnings estimates compiled by S&P Capital IQ anticipated $1.32 per share. Non-GAAP EPS of $1.30 for Q2 were 5.8% lower than the prior-year quarter's $1.38 per share. GAAP EPS of $1.01 for Q2 were 9.0% lower than the prior-year quarter's $1.11 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 67.5%, 80 basis points worse than the prior-year quarter. Operating margin was 20.2%, 190 basis points worse than the prior-year quarter. Net margin was 17.1%, 160 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $14.07 billion. On the bottom line, the average EPS estimate is $1.34.
Next year's average estimate for revenue is $57.34 billion. The average EPS estimate is $5.14.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 1,460 members out of 1,508 rating the stock outperform, and 48 members rating it underperform. Among 442 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 428 give Novartis a green thumbs-up, and 14 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Novartis is outperform, with an average price target of $80.28.
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