BASEL, Switzerland (AP) _ Novartis AG (NVS) on Wednesday reported fourth-quarter net income of $1.19 billion.
The Basel, Switzerland-based company said it had net income of 51 cents per share. Earnings, adjusted for non-recurring costs, were $1.24 per share.
The results missed Wall Street expectations. The average estimate of three analysts surveyed by Zacks Investment Research was for earnings of $1.33 per share.
The drugmaker posted revenue of $13.27 billion in the period.
For the year, the company reported profit of $12.61 billion, or $5.38 per share. Revenue was reported as $51.9 billion.
“During 2018, we took actions that reflect this strategy and our capital allocation priorities,” the company said in its news release. “We concluded the strategic review of Alcon and expect to spin-off the division in H1 2019. Alcon is positioned for sustainable long term top line growth and margin expansion as demonstrated by the strong 2018 results. We agreed to sell the Sandoz US oral solids and dermatology portfolio.”
In June, Novartis announced in planned to spin off its eye care division, Alcon, based in Fort Worth.
For the quarter, the company said Alcon net sales were USD S1.8 billion (+2%, +4% cc). Surgical growth of 6% (cc) was driven by continued double-digit growth of advanced technology IOLs (AT-IOLs), as well as continued growth in consumables. Vision Care sales grew 3% (cc), including continued double-digit growth of Dailies Total1 and strong Systane performance, according to the news release.
For the year, Alcon net sales were USD S7.1 billion (+6%, +5% cc) for the full year. Surgical sales grew 7% (cc), with growth across all key product categories, driven mainly by AT-IOLs and consumables. Vision Care sales grew 3% (cc), mainly driven by growth in contact lenses with continued double-digit growth of Dailies Total1, according to the company..
The company that efforts towards the proposed 100 percent spin-off of the Alcon eye care division are progressing with the Novartis Board of Directors providing final endorsement of the potential transaction, according to the news release. Novartis shareholders will vote on the proposed spin-off at the Annual General Meeting of Shareholders (AGM) on Feb. 28.
A brochure for Novartis shareholders on the proposed Alcon spin-off published today offers an indicative timeline for completion of the transaction during the second quarter of 2019.
In addition to shareholder approval, completion of the proposed Alcon spin-off remains subject to certain conditions precedent, such as no material adverse events, receipt of necessary authorizations as well as tax rulings and opinions.
If all necessary approvals are secured and steps completed, the spin-off would be implemented through the distribution of a dividend-in-kind of Alcon shares to Novartis shareholders and ADR (American Depository Receipt) holders. The distribution is expected to be tax neutral on a US and Swiss income tax basis. If the distribution is approved at the Novartis shareholder meeting and the conditions precedent for it are met, shareholders will receive the following:
For every 5 Novartis shares: 1 Alcon Share
For every 5 Novartis ADRs: 1 Alcon Share
The Novartis shareholder brochure also provided the names and biographies of the individuals who will comprise the future Alcon Board of Directors to be led by Chairman Designate, Mike Ball. The Directors are as follows: Lynn Bleil, Arthur Cummings, M.D., David J. Endicott, Thomas Glanzmann, D. Keith Grossman, Scott Maw, Karen May, Ines Pöschel and Dieter Spälti.
The Novartis shareholder brochure for the proposed Alcon spin-off can be accessed here: https://www.novartis.com/sites/www.novartis.com/files/2019-novartis-agm-alcon-en.pdf
Novartis shares have increased roughly 1 percent since the beginning of the year. The stock has fallen almost 7 percent in the last 12 months.