SWISS pharmaceuticals giant Novartis on Thursday (April 24) posted a 24-percent jump in first-quarter net profit, driven largely by the sale of a blood transfusion diagnostics unit.
The company, which earlier this week announced an extreme make-over of its structure, said it had raked in a net profit of $2.96bn (£1.76bn) during the first three months of the year.
Not counting acquisitions or other exceptional events such as the $900m (£536m) it booked during the quarter on the sale of its blood transfusion diagnostics unit to the Spanish firm Grifols, Novartis said its net profit remained flat year-on-year at $3.12bn (£1.85bn).
That was slightly higher than the £3.05bn expected by analysts, according to a poll by Dow Jones Newswires.
The company meanwhile saw its net sales edge up just 1.0 per cent during the quarter to $14.02bn (£8.35bn), missing analyst expectations it would rake in $14.22bn (£8.46bn).
Largely thanks to the diagnostics unit sale, announced last November, Novartis meanwhile saw its operating profit for the quarter soar 22 per cent to $3.5bn (£2.08bn).
Investors appeared disappointed, sending Novartis's share price down 1.11 per cent to 75.40 Swiss francs a piece in midday trading as the Swiss stock exchange's main SMI index inched up 0.02 per cent.
Novartis chief executive Joe Jimenez was upbeat though.
“Novartis delivered a solid quarter, with all divisions contributing to growth,” he said in the earnings statement, adding that going forward, things should only get better.
'Transformational deals'
“The transformational deals announced on Tuesday (April 22) position the company for future success based on our sharpened focus, innovation power and financial strength,” he said.
He was referring to the unveiling of several multi-billion-dollar deals with British GlaxoSmithKline and US group Eli Lilly promising a major shake-up of the pharmaceutical sector.
The string of takeovers and ventures by the three giant healthcare giants will see Novartis sharpen its focus on the high-grossing cancer sector, GSK boost its share in vaccines and Eli Lilly strengthen its animal health unit.
In the biggest of the deals announced on Tuesday, Novartis said it would buy GSK's cancer treatment business for $16bn (£9.52bn) in cash, including $1.5bn (£893m) that would depend on future performance.
In exchange, the Swiss group plans to sell its vaccines division, excluding flu vaccines, to the British company for up to $7.1bn (£4.22bn), also in cash.
The two groups also plan to create a joint consumer healthcare business, expected to book around $10bn (£5.95bn) in annual sales.
Novartis meanwhile maintained its outlook for the full year, saying group net sales were expected to grow “at a low to mid-single digit rate” in 2014, despite growing impact from generic competition.
The company also said it expects its operating income to grow more than its sales this year.
