Novartis Posts $2.46 Per-Share Profit, Raises Core Operating Income Outlook
Key Facts
Novartis reported third-quarter results on October 27, 2026, and raised its full-year core operating income outlook, reversing its previous guidance, which had pointed to a decline during the year. A Wall Street Journal headline said the company raised its outlook despite clinical trial setbacks. As an indicator of earnings performance, non-GAAP earnings per share came to $2.46, beating estimates by $0.22, according to a Seeking Alpha headline. The available information did not include the amount of the new guidance increase or details of third-quarter sales. The results presentation was scheduled to be broadcast the same day at 13:00 Central European Time, 12:00 GMT and 08:00 U.S. Eastern Time.
Before reporting third-quarter results, Novartis expected low single-digit growth in net sales and a low single-digit decline in core operating income at constant exchange rates. That guidance followed a first half in which sales rose 1% in dollars but fell 2% at constant exchange rates. Over the same period, core operating income declined 6% in dollars and 7% at constant exchange rates, the company said. In the second quarter alone, sales were $14,408 million, compared with $14,054 million a year earlier, up 3% in dollars and 1% at constant exchange rates. Second-quarter core operating income was $5,940 million, versus $5,925 million, unchanged in dollars and at constant exchange rates.
Second-quarter indicators show that sales growth was not accompanied by a similar improvement in core profitability measures. The core operating income margin was 41.2%, down 70 basis points at constant exchange rates, while core earnings per share reached $2.41. Core earnings per share fell 1% at constant exchange rates and was unchanged in dollars, according to the company statement. Free cash flow was $5.6 billion in the second quarter, down 12% year over year in dollars. The increase in the core operating income outlook after third-quarter results therefore marks a change from the previous guidance, though the size of the adjustment was not specified in the available information.
A group of drugs recorded strong second-quarter sales growth at constant exchange rates, including Kisqali, up 43%, and Kesimpta, up 32%. Scemblix sales rose 89%, Pluvicto 43% and Leqvio 59% over the same period. This came as overall sales increased just 1% at constant exchange rates, according to company data. Chief Executive Vasant Narasimhan said in July that the company was "on track to deliver several important pipeline readouts in the second half," adding that it was on track to meet its full-year guidance and medium-term outlook. These products provide a backdrop for sales growth, while first-half and second-quarter figures reflect pressure on some profitability measures.
The outlook increase followed two Phase 3 clinical trials that failed to meet their primary endpoints in September. On September 4, Novartis announced that its Lp(a)HORIZON trial of pelacarsen had not met its primary endpoint. Four days later, the company said its HARBOR study of pelacarsen had also failed to meet its primary endpoint. Third-quarter results a year earlier showed net sales of $13,909 million and core operating income of $5,460 million. Core earnings per share that quarter were $2.25, while sales rose 7% at constant exchange rates and 8% in dollars, and core operating income increased 7% and 6%, respectively.
Daily closing data showed Novartis shares ended the October 26 session at $153.81, ahead of the third-quarter results announcement. The available information did not include a post-results share price or market reaction. The next event listed on the company calendar is a meeting with Novartis management in London on November 19, 2026. A company filing also indicated that the meeting is scheduled for November 18 and 19. The meeting follows the annual guidance update, as the company balances growth from existing products with challenges revealed by clinical trials.