Swiss drugmaker Novartis said the strong dollar could hurt sales and operating income more than originally expected this year as it reported solid second-quarter core earnings and said it had resumed production at a U.S. manufacturing site.
Novartis [NVS 56.36 0.20 (+0.36%) ] reported that second-quarter core earnings per share fell 7 percent to $1.38, beating a Reuters analyst consensus of $1.33, while net sales fell 4 percent to $14.3 billion, compared to a poll average of $14.283 billion.
Novartis said it expected a hit of 4 percent to sales for the full year and about 3-4 percent on operating income due to the strong dollar, assuming June average exchange rates prevailed for the rest of the year, up from previous guidance for an impact of 2-3 percent on sales and operating income .
Novartis is banking on sales of its newest products, such as multiple sclerosis pill Gilenya, to offset declines in top-selling high blood pressure drug Diovan which went off patent in Europe last year and will lose exclusivity in the United States this September.
Like its rivals, Novartis is also facing pressures from European austerity measures as government cut prices for medicines and some countries in southern Europe rack up unpaid bills.