Novartis profits down in first quarter

 

Swiss pharmaceutical giant Novartis saw its first quarter net profit fall 4.0 percent to $2.82 billion, the company announced on Tuesday.

The fall was mainly due to financing costs related to its purchase of eyecare giant Alcon, the company said.

One-off costs associated with merging Alcon over the next three years are expected to reach $600 million. The sum includes severance, retention and relocation charges, said the group.

The integration of Alcon into Novartis' IT platform alone is estimated to cost around $350 million, it added in its earnings statement.

Meanwhile, sales were up 16 percent in the first three months of the year at $14 billion, as the group benefitted from reporting in the US dollar, which has weakened against most key currencies.

The currency impact translated to a 2.0 percent boost on sales, noted the group.

Novartis chief executive Joseph Jimenez expressed satisfaction at the results, saying that "contributions from all businesses led to a good start in 2011."

The Basel-based group confirmed its targets for the year, saying that it expects sales to "grow around the double-digit mark in 2011."

It added that if exchange rates in March were to prevail for the whole year, there would be a positive impact of 3.0 percent on sales, and a negative impact of -2.0 percent on its operating income for the full year.