Novartis raises 2024 outlook after 9% third-quarter sales growth

Novartis raised its full-year sales and profit guidance after reporting 9% sales growth in the third quarter, according to the Swiss drugmaker. The company said sales for the period reached $12.82 billion, while core earnings per share rose 18% to $2.06.

The revised outlook signals that Novartis now expects stronger top-line and operating profit growth than it had previously indicated. The company said it anticipates sales growth in the low double digits for the year, compared with its earlier range of high single-digit to low double-digit growth.

Novartis also lifted its target for core operating income growth. It now expects that measure to increase in the high teens, compared with a previous expectation for growth in the mid-to-high teens.

Guidance moves higher

Corporate guidance is a management estimate of expected performance over a stated period. For investors, a higher guidance range can indicate that recent trading has exceeded earlier assumptions or that management has greater confidence in the remainder of the year. Novartis attributed the update to its third-quarter performance, without giving further detail in the figures reported.

• Third-quarter sales: $12.82 billion, up 9%, according to Novartis.
• Core earnings per share: $2.06, up 18%, according to the company.
• Full-year sales guidance: low double-digit growth, raised from a high single-digit to low double-digit range.
• Full-year core operating income guidance: high-teens growth, raised from mid-to-high teens.

The core operating income measure is a profit metric used by companies to present earnings performance before certain items. Novartis did not provide additional breakdowns in the reported figures, and the update did not include detail on individual products, regions or cost lines.

The change in guidance places the emphasis on operating leverage as well as sales growth. When core operating income grows faster than revenue, it can indicate that profit is expanding at a higher rate than sales, though the reported figures alone do not identify which business drivers contributed to that gap.

Novartis shares listed under the NOVN ticker were shown down 0.08% in MarketWatch data alongside the report. The company’s updated guidance gives investors a higher benchmark for assessing its full-year performance when it reports subsequent results.

This story draws on original reporting from MarketWatch.